Ripple executives used XRP Community Day to reaffirm that XRP is central to the company’s strategy, with president Monica Long saying she expects institutional adoption at scale by the end of 2026. That claim is worth revisiting when the year is over, but the fundamentals behind it are worth understanding now.
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Why banks actually care
David Schwartz put it plainly: banks don’t care about the philosophy of blockchain, they care about cutting costs. Money sits idle over weekends, on the roughly ten annual bank holidays, and overnight, which adds up to a meaningful share of the year where capital isn’t earning anything. A network that lets banks move and settle payments 24/7 removes that dead time, and that’s the actual value proposition driving interest, not ideology.
RLUSD is playing a specific role here as what Ripple’s team describes as a gateway. It’s being used across payment flows, treasury management, and as collateral within Ripple Prime, and Ripple has said it’s working to pilot other stablecoins in different currencies and jurisdictions, including an AED-backed coin with a UAE bank. The idea is that stablecoins and XRP work together: stablecoins provide a stable unit institutions are comfortable holding, while XRP provides the settlement layer that connects otherwise siloed stablecoins to each other.
Volatility is the real obstacle, and liquidity is the fix
David Schwartz named two specific obstacles to institutional XRP adoption: regulatory uncertainty and volatility. Institutions generally won’t hold a volatile asset at meaningful scale on their balance sheets, even if they’re comfortable with volatility in smaller allocations. The argument from Ripple’s side is that deeper liquidity solves this the same way it does for major stock indexes: once enough capital is flowing through an asset, it takes much larger moves to shift the price meaningfully, and that stability is what unlocks further institutional interest. Regulatory clarity from the Genius Act, and potentially the Clarity Act, is the other half of that equation.
Backend settlement comes before tokenized stocks
SEC Chair Paul Atkins has discussed tokenizing the back end of the stock market, and the sequencing matters: real-time settlement (T+0, versus the current T+1) needs to exist between clearing houses and brokers before stock tokenization itself rolls out. The Texas Stock Exchange launched this year and plans to start with ETFs before eventually moving toward tokenized products. Permission DEXs, which went live on the XRPL on February 18th, complete the technical piece Ripple has pointed to as the last requirement for institutional payment flows, alongside existing digital identity credentials and permissioned domains.
What this means for a target price
Some in Ripple’s orbit have floated the idea that XRP would need to reach a much higher price, frequently cited around $100, before Swift-scale institutions could actually settle meaningful volume through it without moving the market too much. I want to be careful here: that’s a level of liquidity institutions say they’d need, not a guarantee that price gets there or a timeline for when it might. Sentiment in the broader market has been notably weak even as this institutional groundwork continues, which is the kind of gap between sentiment and fundamentals worth watching rather than reacting to.
None of this is investment advice. If you’re considering an allocation based on this thesis, do your own research and talk to a licensed advisor who can look at your specific situation.
Educational only, not tax, legal, or investment advice. Check primary sources and speak with a qualified professional before making financial decisions.
