Key takeaways Former Ripple adviser questions XRP demand from institutional adoption Banks can transfer stablecoins without using XRP as collateral Liquidity, compliance and custody remain ma
Banks could increasingly adopt the XRP Ledger without generating proportional demand for XRP, according to former Ripple CBDC adviser Anthony Welfare, who argues that technological capabilities alone cannot guarantee widespread institutional adoption.
Speaking on the AllinCrypto Podcast, Welfare discussed the gap between XRPL's ability to support payments and tokenization and the requirements banks must satisfy before deploying blockchain infrastructure at scale.
Former Ripple Adviser Questions Link Between XRPL Adoption and XRP DemandWelfare acknowledged that XRPL offers several features relevant to financial institutions, including fast settlement, low transaction costs and a built-in decentralized exchange.
However, he emphasized that liquidity, custody arrangements, regulatory compliance and interoperability remain essential to turning those capabilities into commercial applications.
The distinction between XRP and XRPL is particularly important.
XRP is the network's native digital asset, while the XRP Ledger can also support issued currencies, stablecoins and tokenized financial instruments.
According to XRPL's official documentation, every standard transaction requires a small XRP-denominated network fee, normally 10 drops, or 0.00001 XRP.
The network also requires accounts to maintain XRP reserves, currently starting at 1 XRP per account.
However, these requirements do not mean that banks must use XRP as the principal asset for every payment.
For example, two institutions can transfer an issued dollar stablecoin through XRPL without converting the entire payment amount into XRP.
That distinction becomes increasingly relevant as Ripple expands its institutional payment infrastructure.
Ripple's Banking Partnerships Put Stablecoins in FocusRipple recently partnered with DriveWealth to connect RLUSD-based funding infrastructure to a brokerage network serving more than 100 financial partners.
The DriveWealth integration begins with European operations, while expansion into the United States remains planned.
The arrangement illustrates how financial institutions can benefit from XRPL's infrastructure while using RLUSD rather than XRP as the principal settlement asset.
However, this does not eliminate XRP's role.
The token remains necessary for transaction fees and account reserves, while certain cross-currency payments and liquidity strategies can use XRP directly.
The important variable is therefore not simply how many institutions announce integrations, but whether their applications create sustained demand for XRP-denominated liquidity.
Other institutional initiatives create more direct exposure.
Nasdaq-listed Evernorth holds approximately 473 million XRP and plans to deploy its treasury through institutional trading and yield strategies.
Unlike a stablecoin payment integration, Evernorth's business model directly involves holding substantial quantities of the native token.
Meanwhile, XRP-backed DeFi protection on Flare provides another example of capital being deployed through XRP-linked infrastructure.
What Would Drive Meaningful XRP Demand?Welfare also suggested that private blockchain networks could initially attract more institutional activity, with certain transactions or records eventually connecting to public infrastructure.
That would make interoperability particularly important, rather than guaranteeing that one public blockchain captures the entire market.
His argument does not suggest XRP has no institutional use. Instead, it separates the ledger's potential adoption from the token's investment outlook.
Growing transaction counts may increase XRP fee consumption, but low fees mean high activity alone does not establish substantial buying pressure.
