Ripple’s push tests whether banks will choose XRP or Stablecoins

Ripple has secured a critical regulatory foothold in the European Union, marking the firm’s second major licensing victory in less than a week.

On Jan. 14, the crypto-focused payment company announced it received preliminary approval from Luxembourg’s regulator, the Commission de Surveillance du Secteur Financier (CSSF), for an Electronic Money Institution (EMI) licence.

While the approval is technically preliminary, Ripple has framed the move as the strategic gateway that will allow it to passport its services across the 27 member states of the EU.

This places the firm on a collision course with the region’s traditional banking infrastructure just as the Markets in Crypto-Assets (MiCA) regulation reshapes the competitive landscape.

A dual-Hub Strategy and Global Momentum

Ripple’s Luxembourg license is not an isolated event but the latest component of a carefully orchestrated two-hub strategy for Europe.

The move comes only days after Ripple confirmed it had secured approvals from the UK Financial Conduct Authority (FCA) for an EMI licence and cryptoasset registration.

This combined regulatory buildout positions Ripple with a dual-anchored operating model that uses London to service the UK’s deep treasury and FX markets, while leveraging Luxembourg to access the broader European Single Market.

Indeed, the regulatory permissions are already being stress-tested by live banking deployments. Last December, Ripple announced that AMINA Bank had become Ripple Payments’ first European bank customer.

The Swiss-based bank is using Ripple’s licensed end-to-end payments solution for near real-time cross-border transfers.

Monica Long, Ripple’s President, said:

Indeed, Europe has been raising the bar for all payments. The ECB’s Instant Payments Regulation is pushing traditional banks toward mandatory instant settlement, eroding the speed advantage that crypto once claimed.

Meanwhile, Ripple’s expansion comes as the company reports significant operational growth. Ripple stated that the momentum is now global, citing a portfolio of over 75 licenses and registrations worldwide and more than $95 billion in transaction volume processed to date.

The firm also claims to be reaching 90% of daily FX markets, a statistic that suggests the network has moved well beyond the experimental phase.

XRPL’s compliance layer

Ripple’s licensing push is running parallel to a technical overhaul of the XRP Ledger (XRPL), the decentralized blockchain that underpins its settlement products.

The firm has consistently maintained that its goal is to make the ledger look more like the regulated settlement layers that compliance departments demand.

A key part of this roadmap is the introduction of “Permissioned Domains,” a feature that enables institutions to operate on a public network with strict controls.

The technical nuance here is critical for institutional adoption.

Banks often avoid public blockchains because they cannot control who they transact with. Permissioned Domains solve this by creating “walled gardens” on the public ledger.

This functionality opens the door for complex financial operations. RippleX, the company’s developer arm, explained that the upcoming Lending Protocol may also apply Permissioned Domains for controlled lending and borrowing flows.

Considering this, RippleX stated that the update represents a “game-changer for XRPL because they bring institutional-grade controls to a public network, without sacrificing the trade-offs of a private chain.”

The amendment for Permissioned Domains is nearing the threshold for activation.

For executives at Ripple, this is not just about code but about opening specific payment corridors that were previously too risky or complex to automate.

Luke Judges, a Ripple executive, emphasized the commercial utility of the upgrade by pointing out that it could enable payment flows across the Brazilian Real (BRL) to USD corridor with XRPL as the settlement rail.

Does XRP win?

Crypto traders treated these developments as being bullish for XRP, the native token of the XRPL. The asset climbed more than 3% to about $2.17 as of press time.

However, the more important question is not whether this fresh stack of licenses can spark a short-term rally. It is whether the regulatory momentum in Europe will translate into structural demand for XRP, or whether it mainly accelerates a stablecoin-led payments model that reduces the token’s role to an optional routing tool.

Notably, Ripple’s product design leaves both outcomes on the table.

Ripple Payments can move value by sourcing XRP, transmitting it on-chain, and paying out in local currency. It can also route the same transaction flow using stablecoins such as RLUSD.

That flexibility is attractive for banks and payment firms, but it creates a split investment narrative: the same compliance “green lights” can expand Ripple’s distribution while diverting settlement volume away from XRP.

So, in a stablecoin-first regime, Europe’s compliance posture, treasury preferences, and accounting realities can favor fiat-pegged assets, pushing more flow toward RLUSD.

Indeed, AMINA’s RLUSD integration signals that this track is already available. Under that setup, XRP becomes a specialist instrument, used when it is cheaper, faster, or meaningfully more liquid than the stablecoin alternative in a given corridor.

Meanwhile, a mixed-routing regime would be more constructive for XRP, though it remains conditional.

XRP could capture volume where market makers are willing to warehouse volatility risk and where regulated liquidity deepens enough to make it a dependable bridge. This would be useful in corridors where direct stablecoin pairs are thin or fragmented.

The final scenario is XRP-led, where banks, payment firms, and liquidity providers consistently prefer the native token for their operations.

However, that outcome is the hardest to bank on because it depends on treasury policy, risk limits, and liquidity provisioning decisions inside institutions.

Essentially, what looks more likely is an architecture where stablecoins do more of the heavy lifting as they become embedded in cross-border workflows, with XRP competing for share where it offers a clear, measurable advantage