Stellar (XLM) vs Ripple (XRP): Which Payment Coin Is Better?
Stellar (XLM) and XRP (XRP) share co-founders and have similar goals. The main difference is the paths they followed: XRP focuses on institutions with a centralized model, while XLM champions decentralization and retail users.
For investors and developers alike, understanding these differences is crucial. It helps clarify which coin better aligns with your portfolio goals, risk tolerance, or intended use cases.
In this article, we’ll break down the XLM vs XRP debate by comparing technology, performance, decentralization, institutional adoption, and future outlook, helping you decide which payment coin is better.
Key Takeaways
- XRP and XLM are popular cryptocurrencies for payment use cases. XRP Ledger is more centralized, while Stellar is decentralized.
- Ripple is building an ecosystem around banks and financial institutions, while Stellar focuses on individuals and peer-to-peer use.
- Ripple has a more diverse product suite, including its own stablecoin, while Stellar’s flagship product is the blockchain network itself.
Check this comparison table to see how XRP and XLM’s key metrics differ.
What Is XRP?
Co-founded by Jed McCaleb, Arthur Britto, and David Schwartz in 2012, Ripple Labs developed a blockchain-based payment protocol aimed at revolutionizing cross-border transactions.
At the heart of this system is the XRP Ledger (XRPL), an open-source, decentralized blockchain specifically designed for fast and low-cost global payments. It serves as the foundational technology that supports Ripple’s payment infrastructure.
Unlike traditional blockchains that use proof-of-work (PoW) or proof-of-stake (PoS) mechanisms, XRPL operates using the Ripple Protocol Consensus Algorithm (RPCA).
This consensus model relies on a network of independent validators to agree on the order and validity of transactions. While anyone can run a validator node, Ripple Labs maintains a default Unique Node List (UNL), currently made up of 35 trusted validators, drawn from a broader network of over 170.
Alongside the ledger is XRP, the native digital asset of the XRP Ledger. XRP acts as a bridge currency for financial institutions and payment providers, allowing for quick liquidity and efficient currency exchange when sending money across borders.
By utilizing XRP, institutions can avoid the need to pre-fund accounts in destination currencies, significantly lowering transaction costs and settlement times.
However, some critics argue that the XRP Ledger’s consensus model results in a relatively high degree of centralization, especially compared to other public blockchains. This trade-off, however, allows for near-instant transaction finality and extremely low energy consumption, making XRPL one of the most efficient blockchains in operation today.
Ripple Products and Features
Ripple’s flagship product is its payment platform, which has also extended to custody and stablecoin solutions. Here is a breakdown of what it offers today.
Payments
Ripple Payments allows banks and financial institutions to integrate crypto and stablecoins for cross-border payments and payouts. The solution covers over 90 markets and over 50 currencies, offering faster execution than traditional systems.
While the payment solution can work without XRP, facilitating international transfers and direct forex conversions, the cryptocurrency can be used for on-demand liquidity (ODL). XRP acts as a bridge between two fiat currencies for instant transactions at a low cost.
Custody
Ripple offers custodial solutions for institutional clients, supporting crypto assets like Bitcoin, Ethereum, and stablecoins.
Stablecoin
At the end of 2024, Ripple launched its own USD-backed stablecoin, RLUSD, which crossed $400 million in market cap as of June 2025. RLUSD can be integrated into the payments network and adopted by crypto exchanges. The stablecoin is available on XRP Ledger and Ethereum, thus being compatible with decentralized finance (DeFi) apps as well.
Ripple’s global network includes over 100 banks, payment providers, and other institutions across dozens of countries, including Santander, Canadian Imperial Bank of Commerce, TransferGo, SBI Remit, and Siam Commercial Bank.
What Is XLM?
Stellar is a public blockchain network that powers a global payments platform. Financial institutions and individuals can send the native Stellar Lumens (XLM) coin or convert cryptocurrency or fiat currencies to make money transfers across the world.
Stellar was launched in 2014 by former lawyer Joyce Kim and Jed McCaleb, a key Ripple co-founder. McCaleb created Stellar as a truly decentralized, peer-to-peer (P2P) network after disagreements with Ripple’s Chris Larsen.
Unlike Ripple Labs, the Stellar Development Foundation (SDF) is a nonprofit that supports the network’s growth without exerting control over the ecosystem, acting more like the Ethereum Foundation.
The Stellar chain is the core element of a global payment network. It is faster, cheaper, and more efficient than rigid blockchains like Bitcoin and first-generation smart contract chains like Ethereum. In fact, Stellar’s design was inspired by Ripple, although its Stellar Consensus Protocol (SCP) works differently.
The SCP is a proof-of-agreement (PoA) consensus algorithm that relies on a voting system involving trusted nodes. Each node has to choose a “quorum slice,” i.e., a list of other validators it trusts. While everyone can set up a node to participate in consensus, entities like the SDF and financial institutions are more likely to be included in quorum slices, giving them more influence.
Stellar is designed to connect with traditional banks and payment rails, using its XLM coin as a bridge between fiat currencies and other assets.
Stellar Products and Features
Stellar’s main product is the blockchain network itself, which can be used to build decentralized payment applications, tokenize assets, and integrate with traditional financial systems. Below we explore some of the tools offered by Stellar.
MoneyGram Ramps
Businesses can plug into MoneyGram’s global network, enabling users to deposit or withdraw cash from their crypto wallets through Stellar USDC without a bank account. Users can easily convert their cash into stablecoins and vice versa.
Anchor Platform
This solution helps businesses integrate with Stellar’s ecosystem without hassle, benefiting from its payment rails focused on cross-border payments, deposits, and withdrawals.
Disbursement Platform
This tool helps businesses initiate and disburse bulk payments that settle instantly around the clock. The platform enables micropayments starting at just 1 cent, offering full transparency and lower costs than traditional systems.
Stellar Asset Sandbox
Stellar helps users create new tokens and tokenize real-world assets on its blockchain.
XRP vs XLM: What Are the Differences?
The XRP Ledger and Stellar share many common elements, even having the same co-founder. However, they have different philosophies, approaches, and target audiences.
Let’s take a closer look at some of the key differences between the two.
Technology: Consensus Mechanism and Centralization
XRP Ledger and Stellar offer limited smart contract functionality and support tokens, but they have different consensus algorithms. Still, both focus on high performance and efficiency.
Ripple decided to go the faster path and improve its network performance at the expense of decentralization. Its UNL-based RPCA protocol is more centralized, with Ripple Labs recommending the list of validators to trust.
Stellar’s SCP algorithm is more decentralized, enabling users to reach agreements collectively based on trust. In fact, Ripple’s centralization is one of the key issues that led to McCaleb’s departure and has fueled ongoing criticism from the crypto community.
| Stellar (SCP) | Ripple (RPCA) | |
|---|---|---|
| Consensus Type | Federated Byzantine Agreement (FBA) | Byzantine Agreement via UNL |
| Trust Model | Decentralized quorum slices (defined by users) | Centralized UNL (with validators recommended by Ripple) |
| Validator Selection | Any node can join and define trust | Anyone can join, but UNL defines influence |
| Staking/Mining | No | No |
Performance: Speed, TPS, and Fees
Since both XRP Ledger and Stellar specialize in global payments, they focus on speed and scalability.
Both networks settle transactions in up to 5 seconds at infinitesimal fees, leaving room for micropayments. XRP and XLM are among the top cryptocurrencies with the lowest fees.
Ripple claims its network can handle up to 1,500 transactions per second (TPS), and Stellar is not far behind with a capacity of 1,000 TPS.
Over the past year, both XRP Ledger and Stellar have had similar daily transaction volumes ranging between 1 and 2 million, with XRP’s volume occasionally spiking beyond 4 million.
Security: How Secure Are XRP and XLM?
Since their launch more than a decade ago, XRP Ledger and Stellar have never experienced security issues, but in theory, Ripple is more centralized and, therefore, less secure than Stellar.
Ripple Labs exerts more control through the blockchain’s UNL model by selecting validators, raising concerns about censorship and the risk of a single point of failure. Conversely, Stellar’s quorum slices ensure greater decentralization and resilience.
In April 2025, Ripple experienced a major security issue, but not at the blockchain level. The platform faced a supply chain attack in which hackers targeted a software tool by inserting a backdoor to steal private keys from XRP Ledger apps that updated the compromised version.
Energy Efficiency and Environmental Impact
Efficiency is one of the main selling points of both XRP Ledger and Stellar, with the two networks using minimal energy for their operations since no mining or staking is involved.
Both have a far smaller carbon footprint than PoW chains like Bitcoin, which annually consumes more energy than entire countries like Poland or Egypt.
In fact, Stellar rivals the likes of Algorand or Hedera, some of the most eco-friendly cryptocurrencies, consuming only 0.00022 kWh per transaction. XRP transactions require slightly more energy at 0.0079 kWh, but this is still very low.
Use Cases: Retail, Remittances, and Financial Inclusion
Ripple offers infrastructure for banks and payment providers, which can move large sums worldwide. It also supports P2P payments and allows micro transactions.
Stellar focuses on individual use, targeting the unbanked population and those requiring fast cross-border transfers. It’s built for everyday use and applications like remittances and mobile wallet peer-to-peer payments.
Compared to Ripple, which mainly focuses on financial institutions, Stellar takes a grassroots approach.
Both XRP Ledger and Stellar support tokenization use cases, enabling users to develop asset-backed tokens, stablecoins, and even meme coins on the XRP Ledger or Stellar’s blockchain.
Tokenomics: Token Distribution, Issuance, and Inflation
Both Ripple and Stellar minted the entire token supply at launch, meaning no new tokens are generated to reward validators or other contributors.
However, XRP and XLM differ in tokenomics in terms of distribution and inflation rate.
XRP has a total supply of 100 billion coins, of which Ripple Labs directly controls 41.5 billion. Upon launch, Ripple Labs locked 55 billion XRP into several escrows on the ledger itself. It has released 1 billion XRP every month for 55 months since its launch.
However, most of the unlocked XRP that comes every month is re-escrowed immediately, and Ripple Labs decides internally how much to re-lock and how much to put in the open market. This type of control has raised concerns about centralization.
Stellar also issued 100 billion XLM at launch, but burned half of it in 2019 to reduce inflation. Today, the total supply remains at 50 billion, of which 31 billion is circulating.
The rest of the tokens are controlled by the Stellar Development Foundation (SDF), which manages several token reserves to support ecosystem growth. However, Stellar is more transparent on its allocation.
Institutional Narratives: Bank and Institutional Partnerships
Both Ripple and Stellar have secured high-profile partnerships over the years, but Ripple’s ecosystem is much larger as it focuses on institutional use and integrations.
The Ripple Payments network (formerly known as RippleNet) includes dozens of banks and institutions across more than 50 countries, including Santander Bank (Spain), American Express, Bank of America, PNC Bank (U.S.), TransferGo (U.K.), Itaú Unibanco (Brazil), LianLian (China), SBI Remit (Japan), Siam Commercial Bank (Thailand), and IndusInd (India).
Additionally, XRP is one of the five cryptocurrencies that U.S. President Donald Trump plans to include in the government’s Crypto Strategic Reserve, while XLM is not there.
Still, Stellar joined forces with key financial industry players to support its network’s growth. Notably, it partnered with MoneyGram to power one of its flagship solutions for cross-border payments.
Stellar has also collaborated with IBM and Deloitte to build cross-border payments solutions, including in developing nations.
Regulation: Legal Landscape
Crypto regulations vary across regions, and global decentralized networks like XRP Ledger and Stellar may encounter challenges and ongoing pressure due to fragmented regulatory frameworks, especially as they both seek to integrate with or even replace traditional financial systems.
However, Ripple has been more affected over the years, as it was targeted by the U.S. Securities and Exchange Commission (SEC). The regulator treats XRP as a security, and accused Ripple in 2020 of selling the token as an unregistered security. Three years later, a U.S. judge ruled that XRP trades on crypto exchanges were not securities transactions.
Earlier in 2025, Ripple and the SEC reached a $50 million settlement, but the token remains in a regulatory gray area.
Conversely, Stellar has faced fewer regulatory pressures, as its network was designed to align with existing regulatory frameworks.
XLM or XRP? Comparing Key Metrics
As covered above, Ripple and Stellar share many similarities, but the two differ in fundamental ways. This table compares key metrics and features of the two largest crypto payment networks:
| Ripple (XRP) | Stellar (XLM) | |
|---|---|---|
| Transaction Finality | 3–5 seconds | 3–5 seconds |
| Fees | $0.00002 per transaction | $0.000002 per transaction |
| Transactions per Second (TPS) | 1,500 TPS | 1,000 TPS |
| Maximum Supply | 100 billion | 50 billion |
| Decentralization | Semi-decentralized – Validator list (UNL) managed by Ripple | More decentralized – Validators selected by users |
| Energy Consumption | 0.0079 kWh | 0.00022 kWh |
| Interoperability | Integration with banks, fiat ramps | MoneyGram ramps, cross-border payments, and tokenization for the unbanked population |
| ISO 20022 Compliance | Yes | Yes |
| Governance | Decisions made by Ripple Payments members; plans to roll out XAO DAO for decentralized governance | Community-driven governance, influenced by validators and the Stellar Development Foundation |
Is there a winner? It mostly depends on goals.
XRP and XLM are both fast, low-cost crypto assets designed for cross-border payments, settling transactions in just seconds. They’re also ISO 20022 compliant cryptos, meaning they can integrate with modern financial systems. But there are some key differences.
XRP handles more transactions per second (1,500 vs. 1,000) and has a higher supply cap; it’s laser-focused on banking infrastructure and more tied to institutions.
Ripple steers much of its governance and validator selection, though, in June 2025, it announced a decentralized autonomous organization (DAO) called XAO, which will let XRP holders have a say in the network’s future development.
In contrast, XLM leans more decentralized; validators are chosen by the community, and governance is more grassroots, thanks to the Stellar Development Foundation.
In short: XRP is banking-friendly and performance-driven; XLM is lighter, greener, and more open. Both serve global payments, but with different philosophies.
XLM vs XRP: Future Outlook
With the latest settlement agreement between Ripple Labs and the SEC and a more crypto-friendly U.S. government, XRP’s future is much brighter.
According to McKinsey, cross-border payment flows reached approximately $150 trillion in 2022 and are expected to grow to $250 trillion by 2027. Ripple aims to capture a significant portion of this enormous market.
Ripple CEO Brad Garlinghouse said that within five years, XRP could account for 14% of the cross-border payment flow currently processed by SWIFT.
Despite concerns over centralization, Ripple remains a leading player in global payments, endorsed by multiple banks and financial institutions.
Moreover, Ripple can go beyond cross-border payments to tap into other vast markets, including tokenization and even DeFi. Its stablecoin and ability to tokenize real-world assets are strong selling points.
Stellar is also well-positioned to capitalize on tokenization and DeFi use cases while consolidating its presence in the cross-border payments space.
According to a 2025 report from the U.S. Faster Payments Council (FPC), Ripple and Stellar’s cross-border networks are expected to gain more traction due to their low-cost and high-speed transactional capacity, meeting the payments needs of the G20 economies, including the EU and the African Union.
XRP and XLM Price Predictions
XRP and XLM are among the top 20 largest cryptocurrencies by market cap, and they still have much room for growth in the coming years.
Let’s start with a brief comparison between the two to see where we are today:
| XRP | XLM | |
|---|---|---|
| Price | $2.58 | $0.26 |
| Market Cap | $152.40B | $8.33B |
| Circulating Supply | 59.07B | 30.96B |
| Maximum Supply | 100 billion | 50 billion |
| Trading Volume (24h) | $4.9 billion | $222 million |
Both XRP and XLM have a circulating supply percentage of about 60%, and the demand side will mainly dictate the price dynamics.
The XRP price prediction turned more bullish after Ripple reached an agreement with the SEC. At the end of 2024, the token experienced a fivefold expansion, and it has greater ambitions for 2025 and the coming years.
With the recent launch of XRP futures on CME, the cryptocurrency attracts more institutional cash, which is essential for long-term, sustainable growth. If the SEC green-lights an XRP exchange-traded fund (ETF), the price may be chasing the $10 mark.
The XLM price outlook is more conservative, as Stellar focuses on functionality rather than speculation or price expansion. XLM is yet to cross the $1 mark and will likely trade below in the coming years.
Can XRP Reach $10?
For 
XRP +5.53%, $10 is a realistic target, especially if the SEC gives its nod for XRP ETFs. Even if that doesn’t happen soon, the legal resolution at the beginning of 2025 and institutional momentum may be enough to support a rally to the $10 target in the coming years.
XRP has a capped maximum supply and implements a basic deflationary mechanism by burning transaction fees.
👉 Don’t miss: Is XRP a Good Investment in 2025?
Can XLM Reach $10?
As mentioned, 
XLM +6.22% slashed its total supply in half, but it’s unlikely to reach the $10 mark anytime soon, as the token mainly focuses on network functionality. Historically, XLM has traded below $1, and breaking this level would be an achievement.
Final Thoughts on XRP vs XLM
XRP and XLM are the two largest and most efficient payment-oriented cryptocurrencies. Their underlying chains enable high-speed, low-cost transactions.
Ripple and Stellar integrate with traditional finance ecosystems to offer cross-border payments and other use cases.
While the two blockchains share similar goals and have the same co-founder, they differ in philosophy and approach. Specifically, Ripple is semi-centralized and focuses on institutional adoption, while Stellar is more decentralized and oriented towards individuals.
XRP boasts greater adoption among banks and payment providers, faster institutional momentum, and a more diverse product suite, including a native stablecoin. Conversely, Stellar is more open to the public, targeting the unbanked population in developing nations.
💡 Investors choosing between the two for long-term potential may go with XRP, as it offers more upside after a favorable regulatory verdict, Trump administration support, and ETF potential. Still, XLM remains highly relevant for its functionality and grassroots utility.
Ultimately, both networks play an essential role in bridging the gap between blockchain and traditional finance.
FAQs
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References
- XRP Validator Chart (xrpscan)
- XRP vs XLM Daily Transactions (Artemis)
- G20 Payment Targets (Faster Payments Council)
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