Not every early cryptocurrency was inspired by Bitcoin’s ideology. Ripple, launched in 2012 by Jed McCaleb (the same person who created Mt. Gox) and Chris Larsen, had different goals. Rather than creating a new form of money to replace fiat, Ripple was designed to improve the existing international banking system. Specifically, it aimed to solve the slow and expensive problem of cross-border wire transfers.
Ripple’s network uses XRP, its native token, as a “bridge currency” for international transfers. Instead of a bank in Japan needing to hold U.S. dollars to send money to America, it could hold XRP and convert at either end of the transaction. This could dramatically reduce the time and cost of international transfers — from days to seconds, from dollars to fractions of a cent.
Ripple’s approach was controversial within the crypto community. Unlike Bitcoin, Ripple pre-mined all 100 billion XRP tokens at the start, with the founders and Ripple Labs keeping a large portion. Unlike Bitcoin, Ripple’s network wasn’t fully decentralized — it relied on a network of validator nodes, many of which were run by Ripple itself. Crypto purists criticized these choices as “not really crypto” and called XRP a centralized token masquerading as decentralized money.
But Ripple’s focus on the banking industry gave it a different kind of legitimacy. The company signed partnerships with real banks and payment providers around the world. Santander, American Express, and dozens of other financial institutions tested or adopted Ripple’s technology. This institutional approach made Ripple one of the most valuable cryptocurrency projects by market cap. At its 2018 peak, XRP briefly surpassed Ethereum to become the second-most-valuable cryptocurrency in the world.
In December 2020, the SEC sued Ripple, alleging that the 2012 sale of XRP constituted an unregistered securities offering. The lawsuit sent XRP’s price crashing and many exchanges delisted the token. The case took years to resolve. In 2023, a judge ruled that XRP sold to retail investors on exchanges was not a security, while institutional sales might be. The partial victory helped Ripple recover, and XRP remains one of the largest cryptocurrencies. Ripple’s story illustrates that crypto isn’t monolithic: not every project wants to replace banks. Some want to work with them.
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