Ripple CTO Explains Why Billions Not Moving On XRP Ledger Yet Despite Partnerships with 300+ Banks

Despite Ripple’s extensive global partnerships of over 300 banks and financial institutions, the XRP Ledger (XRPL) still sees relatively modest on-chain activity. This has raised questions within the crypto community: Why hasn’t Ripple’s widespread adoption translated into billions of dollars in daily on-chain volume?

Ripple’s Chief Technology Officer, David Schwartz, recently addressed these concerns in a candid and detailed post on X. His responses offer key insights into the technical, regulatory, and strategic factors that have shaped XRPL’s growth, or lack thereof, in on-chain utility.

Why On-Chain Activity Remains Limited

According to Schwartz, institutional hesitation is a major reason XRP isn’t yet processing massive volumes directly on-chain. “I think there are several reasons why institutions have historically preferred to use digital assets off-chain rather than on-chain,” he explained.

One of the biggest challenges is regulatory compliance, particularly when using decentralized exchanges. “Even Ripple can’t use the XRPL DEX for payments yet because we can’t be sure a terrorist won’t provide the liquidity for payment,” Schwartz revealed. The inability to verify the identity and legitimacy of liquidity providers makes it difficult for regulated entities to operate on fully open networks.

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However, that may soon change. Ripple is developing tools like “permissioned domains,” which would allow participants to ensure they’re only transacting with verified, compliant entities. Schwartz believes such innovations will open the door for institutional on-chain activity. “We’re close to changing that because institutions are starting to see the benefits of moving on chain,” he added.

Addressing XRP’s Volatility and Use Case

A frequent concern is whether XRP’s price volatility makes it unsuitable for enterprise payments, especially when compared to stablecoins. But Schwartz offered a different perspective. “There are use cases where volatility isn’t a minus, or is even a plus,” he said. For many users, the potential for long-term upside outweighs the short-term risks. “As long as you aren’t very risk-averse, holding it is not a disadvantage.”

And for those asking why anyone would hold a bridge currency like XRP, Schwartz made a practical point: “A bridge currency only works if someone is holding it so that you can get it precisely when you need it.” In a global financial system where it’s not always clear what asset you’ll need next, it can be more efficient to hold XRP, the dominant bridge, than to juggle multiple less liquid assets.

Do Stablecoins Make Bridge Assets Obsolete?

Some argue that as stablecoins grow more popular, the need for bridge currencies like XRP will vanish. Schwartz disagrees, at least in a multi-currency world. “If one stablecoin wins, then no. You would just use that stablecoin as the bridge currency,” he acknowledged. “But I don’t think one stablecoin can win for several reasons, including that a stablecoin can only be stable relative to one particular fiat currency and will always have jurisdictional ties.”

In a world where multiple stablecoins exist, each backed by different currencies and subject to different regulations, a neutral, decentralized bridge asset like XRP retains clear utility. Schwartz argued that XRP would remain essential for connecting “the long tail of tokenized securities, loan portfolios, and so on.”

Why Institutions Might Choose XRPL Over Private Chains

Another question Schwartz addressed was why major institutions, such as BlackRock, would choose to build on XRPL instead of developing their blockchains, as companies like Robinhood are doing.

“I’m not sure how much that will matter so long as we have interoperability and asset portability,” he noted. In Schwartz’s view, the blockchain ecosystem will thrive not on exclusivity but on interconnection. He drew a comparison to Circle, the issuer of USDC. “Why don’t they launch USDC only on their blockchain?” he asked. The answer is obvious: doing so would limit adoption and liquidity.

The same logic, Schwartz believes, applies to tokenized real-world assets. Institutions won’t want to limit their reach by confining themselves to proprietary chains. Instead, they’ll adopt open, liquid, and well-supported networks, like XRPL.

Geopolitical Trust and Jurisdictional Concerns

A more sensitive issue is geopolitical trust. Why would foreign governments or corporations use a network connected to a U.S.-based company like Ripple?

Schwartz clarified that the XRPL itself is not a U.S.-based platform. “It has never discriminated against any particular participant, and if it ever started to, I would hope people would stop using it.” While Ripple, the company, is headquartered in the U.S., it operates licensed entities globally to serve different jurisdictions.

Still, Schwartz admitted that certain regions, such as North Korea or Cuba, are unlikely to use Ripple’s technology due to international sanctions and U.S. oversight. “There might be, in some cases, pushback to a U.S. company having some control over, say, payments between Pakistan and Saudi Arabia,” he said

Nevertheless, Ripple continues to gain trust by operating transparently, complying with regulations, and focusing on regions where adoption is welcomed. “We build trust and we make hay where the sun shines.”

Final Thoughts

David Schwartz’s detailed breakdown highlights why the XRP Ledger, despite Ripple’s extensive network of bank partnerships, hasn’t yet become the world’s dominant on-chain payment infrastructure. The technology is ready, but institutions remain cautious, bound by regulatory, security, and geopolitical concerns.

With innovations like permissioned domains and broader acceptance of public networks, Schwartz believes the shift to on-chain settlement is not only coming, but accelerating. When it does, XRP may finally fulfill its role as the bridge that connects the global financial system.

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