XRP Ledger under pressure as tokenized Treasuries pile up but rarely move
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XRP Ledger now sits at the center of the tokenized U.S. Treasury landscape by sheer supply, yet most of the real economic activity remains elsewhere. On-chain data tracked by RWA.xyz shows that roughly 63% of all U.S. Treasury bill tokens in circulation currently reside on XRPL. Despite that dominance in balances, the bulk of trading, transfers, and liquidity provisioning continues to take place on Ethereum and various layer-2 networks, leaving XRPL in an uncertain strategic position.
This widening gap between where tokens are held and where they are actually used is emerging as a defining fault line in the tokenized asset market. Market participants point out that issuance and custody are increasingly separating from trading and composability: institutions may choose one chain for compliance and settlement assurances, and another for liquidity and integration with decentralized finance.
Two recent developments have pushed XRPL into the spotlight as a candidate for large-scale real‑world asset tokenization. First, Aviva Investors announced a multi‑year collaboration with Ripple aimed at tokenizing traditional fund structures on the ledger. The asset manager framed tokenization as a transition from small‑scale experimentation toward industrial‑grade deployment over the coming decade, signaling that this is not a short‑term pilot but a long‑horizon infrastructure bet.
Second, OpenEden’s TBILL token-a vault-style token backed one‑to‑one by short‑dated U.S. Treasury bills-has concentrated a majority of its circulating supply on XRPL. According to the same RWA.xyz dataset, XRPL is effectively the main balance sheet for TBILL, even though it is not yet the main venue for its active use.
Yet the transfer data tells a more complicated story. Measured on-chain movement of TBILL on XRPL remains modest when compared with the activity recorded on Ethereum and some of its scaling networks. Tokens may be created and parked on XRPL, but the higher-velocity transactions, swaps against stablecoins, and broader integration into financial workflows still tend to occur on other chains. In practical terms, XRPL has become a warehouse for Treasury tokens, while Ethereum and layer‑2s function as the marketplace.
Tokenized U.S. Treasuries themselves are typically structured as tokenized fund shares or vault tokens backed by short-maturity U.S. government securities. The underlying bonds are held by a custodian or trustee, while the tokenized representations circulate on blockchains. This segment has expanded as institutional investors experiment with on‑chain settlement rails, intraday liquidity management, and automated yield strategies that plug into existing treasury operations.
The Aviva-Ripple initiative, however, extends beyond Treasury bills. According to the announcement, the collaboration centers on tokenizing conventional fund vehicles-such as mutual funds or other pooled investment structures-rather than focusing narrowly on short‑term government debt. At this stage, the partnership remains in the design and infrastructure phase: there is no live tokenized fund with a public prospectus, defined eligibility criteria, and a measurable investor base.
From the outset, XRPL’s pitch to institutions has been framed around compliance and settlement performance. Ripple and its partners have repeatedly highlighted built‑in mechanisms for enforcing regulatory constraints, blacklisting where required, and achieving near‑instant transaction finality. This orientation stacks the ledger toward regulated distribution channels and permissioned workflows, instead of the open-ended DeFi composability that has fuelled much of Ethereum’s growth.
In parallel, on‑chain metrics indicate that stablecoin usage on XRPL has been rising, roughly in step with the growth of tokenized Treasury deployments. For institutional treasurers, the combination is conceptually appealing: stablecoins can serve as a cash-like settlement medium, while tokenized Treasuries represent a yield-bearing store of value. Together, they outline a potential operating model where corporate or fund treasuries move seamlessly between liquidity and yield without leaving the blockchain infrastructure.
Despite this, Ethereum and its layer‑2 ecosystem still host the richer liquidity environment for tokenized assets. Market makers have deeper order books, more counterparties, and a wider array of venues-both automated and institutional-on those chains. Tokenized Treasuries issued or bridged to Ethereum can be swapped against multiple stablecoins, routed through professional trading firms, and integrated into structured products at a scale that has not yet materialized on XRPL.
Analysts tracking the sector note that tokenized Treasuries are gradually shifting from a simple “yield on-chain” narrative toward more complex use cases in collateral management and settlement inside the broader financial system. When institutions design lending programs, repo facilities, or collateralized settlement flows, they naturally gravitate toward networks that already support rehypothecation, margining, and robust risk management tools. To date, that infrastructure is more mature on Ethereum and a handful of scaling solutions than on XRPL.
The coming one to three months are seen as a crucial proving window for XRPL’s role in this market. Observers are watching several key signals: whether transfer volumes in Treasury tokens begin to rise on XRPL to match the ledger’s outsized share of token supply; whether more regulated issuers commit to launching products natively on XRPL; and whether Aviva moves from a memorandum‑style partnership to a live, tokenized fund with real holders and trackable flows.
Right now, the data offers a mixed verdict. XRPL clearly functions as a major storage hub for tokenized Treasuries and shows expanding stablecoin activity, but the heartbeat of trading and rebalancing still pulses primarily on Ethereum and its scaling networks. For XRPL, the question is whether it can evolve from being a passive balance sheet to becoming an active financial rail for tokenized government debt and other real‑world assets.
Why issuance and liquidity are diverging
The split between where tokens are issued and where they trade is not accidental. For many institutional players, the choice of issuance chain is driven by regulatory comfort, perceived governance stability, and operational predictability. XRPL, with its long history, predictable fee structure, and focused tooling for compliance, scores well on those dimensions.
Liquidity, however, is a network effect game. Ethereum has spent years accumulating DeFi protocols, liquidity providers, derivative markets, and risk tools that make it attractive for active trading and collateralization. Even if a token is born on XRPL, the economic incentive often favors bridging or recreating it on Ethereum, where it can plug into lending platforms, automated market makers, and structured credit products.
This creates a two‑tier architecture: a “compliant issuance layer” and a “liquidity and composability layer.” XRPL today is largely sitting in the former category. Whether it can also become a significant liquidity layer depends less on its technical capacity and more on whether enough market makers, custodians, and protocol developers choose to prioritize it.
Technical and regulatory positioning of XRPL
From a technical perspective, XRPL offers features that align with institutional requirements: deterministic finality, relatively low and predictable transaction costs, and native tokenization capabilities without the need for complex smart contracts. For regulated asset issuers, this can reduce operational risk and simplify audits.
On the regulatory side, the ledger’s design facilitates features such as issuer-enforced controls, whitelisting and blacklisting, and restrictions on asset movements where required by law. These tools are attractive to asset managers who must demonstrate control over who holds and trades regulated securities, and under what conditions.
Yet these strengths can also be constraints. A system optimized for strict access control and predictable flows may be less attractive to the experimental, permissionless side of the market that has driven the fastest innovation in DeFi. Striking a balance between regulatory assurance and openness to composability remains a core strategic tension for XRPL.
What needs to change for XRPL to capture more activity
For XRPL to move beyond being a large but relatively idle warehouse for tokenized Treasuries, several shifts would likely be required:
1. Deeper institutional market making
Larger trading firms and banks would need to treat XRPL as a primary venue rather than a secondary settlement rail, committing capital to provide tight spreads and meaningful depth in tokenized Treasury and stablecoin pairs.
2. Native financial primitives
While XRPL supports tokenization, it still lacks the breadth of lending markets, derivatives, and structured products that exist on Ethereum. Native protocols tailored for institutional flows-such as repo-style lending or on‑ledger collateral management-could increase on-chain utility.
3. Improved cross-chain connectivity
Reliable, institution‑grade bridging between XRPL and Ethereum or other chains would allow assets to move seamlessly, enabling XRPL to serve as an issuance and custody layer while still participating in broader liquidity networks without fragmentation.
4. Concrete institutional launches
Announcements like the Aviva partnership need to culminate in actual live products: tokenized funds with prospectuses, defined investor universes, and measurable on-chain behavior. Without that, XRPL risks remaining in a perpetual pre‑launch narrative.
Potential scenarios for the next phase
Several trajectories are plausible over the next year:
– XRPL as a specialized issuance and settlement rail
In this scenario, XRPL leans into its strengths and becomes the preferred ledger for compliant issuance, record‑keeping, and custody of tokenized funds and Treasuries. Most high‑frequency trading still happens on other chains, but XRPL is embedded into back‑office and middle‑office workflows at major institutions.
– Gradual build‑out of native liquidity
Over time, as more products launch natively on XRPL, and as stablecoin activity increases, the network reaches a critical mass of liquidity. This could attract DeFi‑style protocols optimized for institutions, making XRPL a more balanced ecosystem for both storage and trading.
– Stalled adoption despite large balances
If transfer volumes remain low and key partnerships do not translate into live, growing products, XRPL could remain a ledger that hosts significant token balances but has limited systemic impact on how tokenized Treasuries are actually used.
The strategic importance of the next 90 days
The observation window of the next 30 to 90 days matters less because of any hard deadline and more because it coincides with important inflection points in institutional planning cycles. Asset managers, banks, and corporates are deciding where to commit technology budgets and which ledgers to integrate into their infrastructure.
If, within this timeframe, XRPL sees a material uptick in Treasury token transfers, the launch of at least one meaningful tokenized fund, or new issuers choosing it as their primary chain, that could reshape perceptions. Conversely, if data continues to show growing balances but flat activity, some institutions may opt to treat XRPL purely as a niche component in a multi‑chain architecture rather than a core venue.
In its current state, XRPL represents a paradox: it dominates by supply in one of the most important tokenized asset categories, yet trails in the very metrics-liquidity, integration, and composability-that usually determine long‑term relevance. How that paradox resolves will determine whether XRPL becomes foundational infrastructure for on-chain capital markets or remains a specialized ledger sitting at the edges of the emerging tokenization stack.