Despite the large volume processed by the XRP Ledger (XRPL) in 2024, the Omni Network CTO believes a 1,000x spike could materialize with greater institutional adoption.
Notably, the XRP Ledger has been a leader in institutional-grade blockchain solutions. Last year, the network’s native decentralized exchange (DEX) processed over $3 billion in trading volume. This signaled its growing significance in the crypto scene.
Potential Institutional Adoption
However, Tyler Tarsi, Co-founder and Chief Technology Officer at Omni Network, believes the XRPL has still not reached its full potential. According to him, the network could see a dramatic increase in adoption, particularly among banks and hedge funds, as President Donald Trump assumes office.
The $XRP Ledger processed over $3,000,000,000 in trades last year.
However, most people don’t understand that it’s pursuing a completely different playbook than other DEXs.
Having built trading algorithms for JP Morgan, here is why I think that strategy might pay off 🧵 pic.twitter.com/1hQJrKkbgd
— Tyler Tarsi (@ttarsi_) January 22, 2025
With President Trump’s pro-crypto stance, industry leaders believe there could be a more favorable regulatory atmosphere for crypto assets and institutions to thrive. Notably, Circle CEO already expects the president to sign an executive order allowing banks to trade and offer crypto to wealthy clients.
Furthermore, the CEO of Bank of America, Brian Moynihan, recently suggested that traditional banks and financial institutions are willing to start adopting blockchain and cryptocurrencies if regulators allow it.
XRPL Designed for Institutions
Amid these discussions, Tarsi believes the XRPL will thrive the most. He noted that the network operates with a distinct strategy. While trading volumes on DEXs have increased exponentially over the years, institutional adoption has remained elusive.
Tarsi attributes this to a lack of compliance functionality, a major barrier for traditional financial institutions like top-tier banks and hedge funds.
He noted that the XRPL is different because it was created with institutional users in mind. The Omni Network CTO cited a previous comment from Ripple CTO David Schwartz to confirm this statement.
From the beginning the $XRP DEX was designed specifically for institutions.
It was purpose built for the highest volume, bank-friendly, tokenized assets like $JPY, $EUR, $GBP, and the new stablecoin $RLUSD.
The real unlock is something that most people aren’t looking at though: pic.twitter.com/rFSnwNjWY0
— Tyler Tarsi (@ttarsi_) January 22, 2025
Notably, the XRPL was specifically designed to handle high volumes and support tokenized assets like major fiat currencies, including the Japanese yen (JPY), euro (EUR), British pound (GBP), and the newly introduced stablecoin RLUSD.
These features make it attractive for banks and hedge funds seeking to enter the crypto trading space. However, according to Tarsi, compliance is a major issue for institutional adoption.
Financial institutions often face strict regulatory requirements, and any platform they use must align with these standards. Most decentralized exchanges currently lack the necessary compliance mechanisms, preventing participation from these entities.
Permissioned Domains
To address this, Tarsi called attention to the XRPL’s “Permissioned Domains” proposal as a potential solution. This feature is designed to enable regulated and compliant trading, addressing a major concern for financial institutions.
Few are aware that one of the $XRP Ledger’s newest upgrades solves exactly this: Permissioned Domains.
Soon, top banks and hedge funds will be able to trade in a regulated, compliant manner on $XRP Ledger.
This could be the missing piece, and we’re already seeing early success: pic.twitter.com/nyWo7Wk0BT
— Tyler Tarsi (@ttarsi_) January 22, 2025
RippleX developer Mayukha Vadari introduced the proposal last September. Notably, Tarsi believes the protocol could lead to the next phase of growth for the XRPL and potentially attract massive institutional trading volume.
The XRPL’s performance over the past year is impressive, considering that the compliance problem has not yet been fully addressed. Tarsi predicts that once the Permissioned Domains feature is implemented, the platform could see a surge in adoption by banks and hedge funds.
Tarsi pointed out that the $3 billion in trading volume recorded last year occurred without participation from traditional financial institutions. He suggests that the introduction of compliance-friendly features could lead to massive growth, with banks potentially driving trading volumes up to 1,000 times higher than current levels.
