XRP, the world's fifth-largest cryptocurrency with a market capitalization exceeding $120 billion, experienced a booming start last year before closing down nearly 9%. The cryptocurrency sector aims to recover after a lackluster 2025, marked by a sell-off driven by concerns over interest rates and activity from large holders.
The XRP network operates on a unique ledger consensus mechanism using a list of trusted validators, including universities, exchanges, businesses, and individuals. This system, while less decentralized than networks like Bitcoin, enables faster transaction validation. The network has the potential to process up to 1,500 transactions per second.
Ripple, the company founded by leaders who helped create XRP in 2012, leverages the cryptocurrency to provide payment solutions. The company serves as a one-stop shop for traditional financial institutions and other entities seeking to offer instant cross-border payments in various fiat currencies or stablecoins. These can be converted to a customer's preferred currency.
Ripple and XRP eliminate the need for banks to pre-fund foreign accounts, as XRP's instant nature provides on-demand liquidity. This offers banks more flexibility with their capital. Ripple CEO Brad Garlinghouse has stated that XRP and Ripple's solutions could serve as a better alternative to SWIFT, the global bank communications system for payment instructions, and potentially capture significant market share.
Ripple recently acquired a large multi-asset prime brokerage where institutional investors can purchase stocks and cryptocurrency at scale. The company is attempting to bridge mainstream finance and the crypto sector.
However, the payments space is competitive. Other networks, such as Solana, also possess robust technical networks with the potential for higher transaction throughput. Mainstream payment giants like Visa and Mastercard are active competitors, and SWIFT is planning to introduce a blockchain ledger for real-time cross-border payments.
The Motley Fool Stock Advisor analyst team identified what they believe are the 10 best stocks for investors to buy now, and XRP was not among them. The team cited historical examples like Netflix and Nvidia, which generated substantial returns for investors following earlier recommendations.