XRP faces pressure to prove real banking utility

Concerns over the practical use of XRP have resurfaced after Evernorth chief executive Asheesh Birla said sustained demand for the digital asset will depend on banks adopting it as working capital rather than treating it as a speculative instrument.

Birla’s remarks come amid renewed scrutiny of XRP’s real-world adoption, with market participants questioning whether the token’s usage aligns with its original proposition as a bridge currency for cross-border payments. While Ripple, the company closely associated with XRP, has secured partnerships with financial institutions over several years, analysts note that transaction volumes tied directly to XRP liquidity remain uneven.

Speaking about the gap between theoretical utility and actual deployment, Birla suggested that XRP’s long-term value proposition hinges on its integration into treasury operations and liquidity management systems within banks. He argued that without such adoption, demand risks remaining cyclical and driven more by market sentiment than by underlying use cases.

XRP was designed to facilitate near-instant settlement between different currencies, reducing reliance on pre-funded nostro accounts that banks traditionally maintain in foreign jurisdictions. This model has been promoted as a cost-saving mechanism for financial institutions, particularly in corridors with limited liquidity. However, industry observers say that while the technology has demonstrated efficiency in pilot programmes, scaling it into everyday banking workflows has proven more complex.

One challenge lies in regulatory clarity. Although Ripple secured partial legal victories in the United States over the classification of XRP in certain contexts, the broader regulatory environment for digital assets continues to evolve. Banks, particularly large global institutions, have been cautious about integrating crypto-based solutions into core operations due to compliance risks and capital treatment uncertainties.

Birla’s comments also highlight a broader issue within the digital asset sector: the distinction between transactional utility and investment demand. XRP, like many cryptocurrencies, has experienced price movements largely influenced by trading activity rather than consistent usage in payment flows. Market data shows that speculative trading volumes often dwarf transaction volumes linked to real-world remittances or settlements.

Supporters of XRP point to Ripple’s On-Demand Liquidity product as evidence of growing adoption. The service enables financial institutions to source liquidity using XRP for cross-border transfers, eliminating the need for pre-funded accounts. Ripple has reported expansion in corridors across Asia-Pacific, Latin America, and the Middle East, with smaller financial service providers and remittance firms among the primary users.

Critics, however, argue that adoption remains concentrated among niche players rather than major global banks. They contend that large institutions continue to favour traditional systems or explore alternative blockchain solutions that do not require exposure to a volatile digital asset. Central bank digital currencies and tokenised deposits have also emerged as competing models, offering programmable features without the same price volatility concerns.

Birla’s emphasis on working capital usage reflects an attempt to reposition XRP within the financial ecosystem. By embedding the token into balance sheet operations, proponents believe it could generate consistent demand independent of market cycles. Such a shift would require banks to hold XRP temporarily during transactions, creating a structural use case rather than a purely transactional one.

Market reaction to the remarks has been mixed. Some investors view the statement as a realistic assessment of the hurdles facing XRP, while others interpret it as a signal that broader institutional adoption may take longer than anticipated. The token’s price has shown sensitivity to developments in both regulatory outcomes and partnership announcements, underscoring its reliance on narrative-driven momentum.

Developments in the wider digital asset landscape add further context. Institutional interest in blockchain technology has grown, with several banks experimenting with distributed ledger systems for settlement and tokenisation. However, many of these initiatives operate within closed networks that do not rely on public cryptocurrencies, reflecting a preference for controlled environments.