What Does XRP Really Do? Expert Explains What It Is Built For

Overview

Recent comments from US Treasury Secretary Scott Bessent have spotlighted the evolving regulatory landscape surrounding blockchain technology and digital assets. Crypto analyst and XRP advocate Levi Rietveld emphasized that these developments align with the foundational purpose of XRP, particularly in enhancing financial infrastructure and payment systems.

Regulatory Focus on Blockchain and Payment Systems

In a post shared on X, Levi Rietveld highlighted a video clip featuring Scott Bessent, who discussed the need to evaluate regulatory barriers that impact blockchain technology, stablecoins, and new payment systems. Bessent’s remarks indicated a governmental push towards reforming financial infrastructure, aiming to enhance the efficiency of capital markets for mainstream users. This focus signifies a shift towards a more accommodating regulatory environment for cryptocurrencies, reflecting a broader trend in the current administration’s approach to digital assets.

Bessent’s policy direction aims to identify and address regulatory impediments that hinder the advancement of blockchain and related technologies. He underscored the importance of promoting an environment where the potential of American capital markets can be fully realized. This initiative is aligned with the ongoing efforts of the US government to modernize regulations surrounding cryptocurrencies, ensuring that clearer frameworks are established for digital assets, including stablecoins.

One notable legislative proposal in this context is the Clarity Act. This act seeks to define the regulatory treatment of digital assets more clearly, distinguishing between payment-focused tokens and securities. It also aims to delineate the oversight responsibilities of regulatory bodies, such as the SEC and the CFTC. By providing a clearer regulatory framework, these initiatives are expected to facilitate the growth and integration of digital assets into the financial system.

The Role of XRP in Modern Financial Infrastructure

Rietveld pointed out that the themes expressed by Bessent resonate with the design and functionality of XRP and the XRP Ledger. The XRP Ledger is engineered to provide transparent settlements, predictable transaction costs, and finality that does not rely on mining or complex smart contract executions. These characteristics are particularly essential for financial institutions that require clarity and reliability in their operations.

XRP’s practical applications are primarily visible through payment solutions developed by Ripple. The cryptocurrency enables banks and financial institutions to avoid the necessity of holding large reserves of foreign currencies, as it can serve as an intermediate asset during settlement processes. This functionality enhances liquidity and reduces the costs associated with cross-border transactions.

XRP’s Current Regulatory and Institutional Position

The pursuit of regulatory clarity has fostered the development of institutional infrastructure around XRP. In 2025, several Spot XRP ETFs received approval and launched, resulting in significant inflows, with over $1.14 billion reported. Estimates from Bloomberg suggest that these funds could attract between $5 billion and $7 billion in institutional capital by 2026. This influx of institutional interest opens new pathways for asset managers, pension funds, and other institutional investors to incorporate XRP into traditional investment portfolios.

These advancements in XRP’s regulatory and institutional standing are closely tied to the proposed frameworks for blockchain, stablecoins, and payment systems discussed by Bessent.

From author

The commentary from Bessent, along with Rietveld’s endorsement of XRP’s alignment with these regulatory efforts, highlights a critical moment for the cryptocurrency. As the regulatory landscape evolves, it is essential to monitor how these developments will impact both the operational capabilities of XRP and the broader acceptance of digital assets in traditional finance.

Impact on the crypto market

• Increased regulatory clarity could enhance institutional confidence in XRP and other cryptocurrencies.
• The approval of Spot XRP ETFs may lead to greater institutional investment in digital assets.
• The proposed Clarity Act could help differentiate between various types of digital assets, facilitating clearer investment strategies.
• Improved payment systems and reduced friction in financial technology may drive broader adoption of cryptocurrencies.
• The focus on reforming financial infrastructure may encourage innovation within the blockchain space, benefiting various projects beyond XRP.