Why Most Banks Hold Back: XRP Co-Founder & CTO Explain the Slow Institutional Uptake

Bank Skepticism: Key Reasons Why XRP Isn’t Broadly Used Yet

1. Compliance & Risk Concerns
Regulated banks avoid public XRPL liquidity—Ripple itself avoids the on-chain DEX because they can’t guarantee counterparties aren’t restricted or malicious.

2. Liquidity & Volatility Issues
While XRP offers speed and low cost, volatility and centralized ownership (~50% supply held by Ripple) remain hurdles many financial institutions shy away from.

3. Slow Institutional Adoption
Ripple CTO David Schwartz acknowledged that although there are many bank partnerships, actual on-chain settlements are slow—most banks settle off-chain. However, he noted institutional interest is growing as benefits become clearer.

4. Historical Misalignment with Blockchain Vision
Contrary to earlier narratives, XRP was originally designed to bypass banking inefficiencies—not specifically for banks to adopt. Its creators intended it as decentralized financial infrastructure accessible to enterprise and retail alike.

Coinccino Insight

“The reluctance isn’t because XRP isn’t functional—it’s because banks move slowly, and compliance, liquidity, and control matter most. With features like permissioned domains, Ripple is bridging traditional finance constraints with on-chain potential across the U.S., UAE, and India.”

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