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Ripple is a crypto payments company whose founders created XRP, its native token. XRP and the blockchain it runs on, the XRP Ledger, are billed as a better way to send money across borders. While the traditional process can take days to complete, XRP international transactions can be settled in seconds — and usually for a fraction of the cost.
XRP has become more widely available to U.S. consumers recently, following the partial resolution of a lawsuit filed against the company by the U.S. Securities and Exchange Commission. A federal judge ruled in July of 2023 that Ripple's sale of XRP on crypto exchanges was not an unregistered sale of securities.
While other legal issues remain for Ripple and XRP, that ruling led several popular crypto platforms to resume listings of the embattled cryptocurrency.
Like any crypto, XRP is a higher-risk investment. And the company's particular legal issues add another set of factors for potential investors to consider. That said, XRP, created in 2012, is one of the most established digital assets, and it has one of the highest market capitalizations in the crypto world — around $40 billion in mid-July.
Here are some things to know if you're considering an investment in XRP.
» Learn more: XRP, Ripple and the SEC
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How to buy XRP
1. Decide whether to invest in XRP
The value of any cryptocurrency can change quickly, and that’s been the story with XRP, as well. If you decide to move forward with an XRP purchase, it’s good to consider its likelihood of long-term growth.
XRP aims to provide a platform for cross-border payments that is faster and more cost efficient. With reduced settlement time and lower costs per transaction, XRP presents itself as a better option for exchanging currency between countries for both individuals and institutions.
According to Ripple’s website, the XRP ledger routinely handles upwards of 1,500 transactions per second (tps). Comparatively, larger and more popular cryptocurrencies like Bitcoin (7 tps) or Ethereum (30 tps) are much slower.
In recent months, the price of XRP has typically traded for well under a dollar.
Transaction fees for other cryptocurrencies can be quite expensive, but XRP’s average cost per transaction has consistently been a small fraction of a penny, making it one of the more cost-friendly blockchain networks.
The SEC lawsuit is ongoing, despite the recent decision by the judge that its sales to consumers were not securities violations.
An SEC complaint filed in December 2020 alleged that XRP was an unregistered security and that the company’s sale of XRP violated federal securities law.
On July 13, 2023, a U.S. District Court judge gave Ripple a victory with an order that said the company hadn't violated securities laws when it sold XRP on crypto exchanges. But the case continues. The company is still contending with allegations that its sales to institutional investors were unregistered securities, and it's possible the SEC could appeal the order on consumer sales.
If you're buying XRP, consider how you think an adverse legal decision might affect its value — and whether that's a risk you're willing to take.
2. Find a place to buy XRP
XRP is traded worldwide, so there are various options if you want to buy it. Centralized exchanges are a common destination for crypto buyers. Many leading exchanges had delisted XRP in light of the SEC lawsuit, but some added it back after the most recent court decision. They include Coinbase and Kraken.
Decentralized exchanges, including peer-to-peer transactions, can be cheaper but more difficult to navigate for new buyers since they require more technical experience. Decentralized exchanges such as Uniswap and PancakeSwap can be used to trade for XRP.
» Learn more about the top crypto exchanges and apps
3. Decide how to pay for XRP
Typically, you can buy cryptocurrencies with cash or crypto.
Cash: Most exchanges accept fiat currencies like U.S. dollars. Platforms differ in how they operate, including what currencies they support, so it’s good to look closely at the one you decide to use. Some require a minimum deposit, support a limited set of fiat currencies, or charge a conversion fee on deposited cash.
Platforms also differ in how you can add cash to your account, but some common methods are Automated Clear House, or ACH, transactions from banks, wire transfers and debit cards.
You may see an option to buy crypto with a credit card. But using high-interest debt this way can be especially risky. If your crypto investments lose value and you can’t pay back your principal, you could be saddled with expensive interest payments.
Cryptocurrency: If you already own cryptocurrency, you could trade some of your existing assets for XRP. Such a maneuver would be an option if you want to own multiple cryptocurrencies without investing more cash.
However, some exchanges don’t accept all cryptocurrencies — and some cryptocurrencies can’t be traded with one another — so be aware of those limitations as you prepare to buy. Additionally, exchanges charge different fees depending on what you’re buying and how.
4. Purchase and store your XRP
After investing in a cryptocurrency like XRP, the last thing you want is to lose your tokens. Deciding where to store your crypto is a vital step in the process.
Using an exchange: This can be a straightforward and simple way to store your cryptocurrency because it outsources management to a third party. However, exchanges also can be a risky option, since they’re susceptible to hacking or technical failures that could cost you your assets. FTX and FTX.US, for example, crashed and filed for Chapter 11 bankruptcy, leaving investors without access to funds. For an additional layer of security, you might want to consider using a digital wallet.
» Learn more: Best exchanges to store your cryptocurrency
Using your own wallet: Storing crypto yourself can be a way to prevent losing your assets to hackers or other unfortunate events outside your control. But it requires you to keep careful track of private keys — long strings of letters and numbers, like a password — that prove your ownership of cryptocurrencies. If you lose track of those, or someone else gets ahold of them, your assets can’t be recovered.
When deciding on a wallet for your cryptocurrency, it’s important to check that it will work with the XRP network, as well as the exchange you plan to use. Once you’ve confirmed they’re compatible, you have a choice of two kinds of wallets.
Hot wallets: These are digital wallets, including web-based, mobile and desktop options. Because they’re connected in some form to the internet, they’re easy to use. However, that same feature can make them vulnerable to hacking.
Cold wallets: These are not connected to the internet until you’re initiating a transaction. That can make them less convenient to use but much more secure. Because a cold wallet is a physical piece of hardware, it can’t be accessed by an unauthorized person unless it’s in their possession.
» Learn more: How to choose a crypto wallet