Former Ripple central bank digital currency (CBDC) adviser Anthony Welfare says the XRP Ledger (XRPL) already has the technical foundation to support payments and asset tokenization. However, broader adoption by financial institutions will depend on practical conditions including liquidity, custody, regulatory compliance and interoperability with existing systems.
Welfare said the market often treats XRP, XRPL and Ripple's wider business ecosystem as part of a single narrative, with the potential to reshape correspondent banking and support a range of financial applications. But he stressed that technical capability alone does not automatically translate into institutional usage.
XRPL offers payment and tokenization tools
Welfare said XRPL's transaction speed, relatively low costs and native decentralized exchange make it suitable for payment settlement and tokenization. For institutions handling cross-border transfers, digital-asset issuance or on-chain trading, these features could reduce some transaction steps and provide infrastructure for exchanging different types of assets.
The availability of those functions, however, does not mean institutions will immediately integrate XRPL into their existing financial systems. They must also determine whether the assets involved have sufficient market depth, who will provide custody, whether trading and settlement meet regulatory requirements, and whether XRPL can connect smoothly with banks, payment companies and other blockchain networks.
Institutions may not need XRP for every transaction
Welfare drew a clear distinction between XRP, the digital asset, and XRP Ledger, the underlying network. Institutions can use XRPL's ledger, payment and tokenization functions without relying on the XRP token for every transaction, he said.
That distinction means institutional adoption of XRPL cannot be measured simply by demand for XRP trading. A company may use the network to issue or settle assets while operating a model that does not involve directly holding or transferring XRP. Market participants assessing XRPL's commercial progress therefore need to track network activity, the structure of institutional partnerships and XRP's actual role in liquidity and settlement.
Private networks could come first
Welfare expects financial institutions to test related applications first on private blockchains or in controlled environments before gradually connecting some activity to, or anchoring it on, XRPL. This approach would allow institutions to address identity management, permission controls, data privacy and internal compliance requirements before deciding how broadly to interoperate with a public ledger.
XRPL's central challenge, therefore, is not simply whether it has payment technology. It is whether the network can address liquidity, custody, compliance and interoperability requirements in day-to-day institutional operations. As institutions begin testing such networks and a new Nasdaq listing arrangement gives more stock-market investors exposure to XRP, attention is likely to focus less on the technology narrative and more on actual usage and sustained demand for financial infrastructure.