Ripple is both a cryptocurrency and a digital payment network for the quick settlement of transactions. The blockchain underpinning the network is known as the XRP Ledger. It uses the native token, XRP, as an intermediate for the exchange of different currencies. This allows for the speedy processing of transactions.
Banks, exchanges, individuals and companies can send money globally using the Ripple blockchain. It reduces the time and cost it takes to transfer funds between institutions. XRP is used for the quick conversion of currencies. Users can transfer fiat and cryptocurrencies easily with near-instantaneous settlement.
Settlement using Ripple takes about 5 seconds and the network can process 1500 transactions per second. Transaction costs are extremely low and are paid in XRP tokens.
Ripple was founded by Chris Larsen and Jed McCaleb in 2012 under the name OpenCoin. In 2013 Jed McCaleb left the company and went on to found the Stellar payment network (Stellar Lumens XLM).
All 100 billion XRP tokens were issued at the launch, with 80 billion going to the Ripple company and 20 billion to the co-founders. The 80 billion tokens are being sold on a schedule to raise funds for the for-profit Ripple company.
Ripple has focused on attracting traditional financial institutions since its launch. However, entering the global financial market has brought legal scrutiny. Ripple was fined in 2015 by FinCEN for violating bank secrecy.
In 2020 the SEC filed a lawsuit that accuses Ripple of raising $1.3 billion in unregistered securities by selling XRP tokens. The SEC claims that XRP tokens are a security rather than a currency. Ripple has denied the allegations and the lawsuit is ongoing
In 2016, Ripple obtained a BitLicense from the State of New York as part of its aim to attract traditional institutions. A BitLicense is a strict financial license for cryptocurrency companies operating in New York.