Ripple CTO Says Banks Focus on XRP Utility, Not Ripple’s Holding

• Joel Katz sarcastically rejects the claim that banks would avoid XRP because of Ripple’s escrowed 34B holdings.
• Banks evaluate XRP based on utility, cost savings, and efficiency rather than Ripple’s token ownership.
• This shifts focus to XRP’s real-world utility and could strengthen its institutional adoption outlook.

Ripple CTO David Schwartz said banks would not avoid XRP just because Ripple holds a large amount of tokens. He argued that financial institutions focus on cost savings and efficiency, not who benefits. 

His comments come as debate around Ripple’s escrowed XRP continues.

JoelKatz Says Ripple Holdings Won’t Stop XRP Adoption

On April 1, crypto investor Mason Versluis questioned why banks would adopt XRP if Ripple holds about 34 billion tokens. He suggested institutions may avoid XRP due to Ripple’s large ownership.

JoelKatz pushed back, saying businesses do not reject profitable solutions simply because another company also benefits. He noted that banks prioritize liquidity, compliance, and cost efficiency when choosing payment tools.

“Yeah, this makes business sense for us to do and would make us money, but we don’t want to do it because it also makes this other company money,” he said, criticizing the argument.

Why Banks Evaluate XRP Based on Utility and Efficiency

Schwartz explained that banks focus on measurable improvements. XRP transactions settle in about 3–5 seconds, while traditional SWIFT transfers can take one to five business days.

Transaction fees on XRPL are also very low, averaging around $0.0002. Traditional cross-border payments can cost $15 to $50 or more.

XRP is used as a bridge asset in On-Demand Liquidity, removing the need for pre-funded accounts. This model helps free capital that would otherwise remain locked in global banking systems.

Institutions such as SBI Remit, Santander, and others have used this model to reduce costs.

XRP Institutional Adoption Could Grow Further

Institutional adoption of XRP is accelerating in 2026, fueled by regulatory clarity, practical cross-border payment utility, and expanding XRP Ledger capabilities. As banks continue to explore efficient payment rails, real-world adoption metrics and regulatory clarity could drive further institutional interest.

A Coinbase and EY-Parthenon survey of 351 institutional investors, 96% of whom manage over $1 billion in assets, found that 18% already hold XRP and 25% plan to add it by the end of 2026, bringing total exposure to about 43% and positioning XRP among the top altcoins alongside Solana.

Meanwhile, XRP’s classification as a digital commodity and advancements such as Ripple’s conditional OCC national trust bank charter, with the final OCC rule effective April 1, 2026, will reduce barriers for U.S. institutions.

Therefore, with clearer rules, better compliance tools, and proven efficiency gains, 2026 is shaping up as a pivotal year for broader institutional integration of both XRP and the XRPL.

Related: Ripple CEO Says Thousands of Switches Flipping for XRP Global Adoption