1 Green Flag for XRP (Ripple) Right Now

Key Points

• Ripple has struggled with a tarnished reputation for years.

• The regulatory environment has improved considerably this year.

• 10 stocks we like better than XRP ›

After it went up 45% this year, Ripple (CRYPTO: XRP) investors are a happy lot. But there's reason for even more optimism. Due to shifts in the regulatory environment, Ripple may finally have a viable path toward achieving its long-term growth vision. There's one catalyst in particular worth monitoring.

Ripple may finally gain mainstream industry adoption

In theory, Ripple has had huge growth potential since its founding in terms of actual adoption of its network. Compared to legacy systems like SWIFT, Ripple allows financial institutions to transfer money between each other and even across borders in a cheaper, faster, more transparent way. What's not to love?

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Today, few major financial institutions in developed markets use Ripple's network. Almost none globally use it at any meaningful scale. The challenge has been two-fold. First, big banks and financial service companies have been using legacy payment networks for decades. They've proven hesitant to adopt a relatively new network with less real-world validation. Second, Ripple has been marred by a poor reputation, fueled by government investigations and the scrutiny of regulators.

Due to recent events, however, both of those challenges may be overcome beginning this year.

Image source: Getty Images.

This summer, Ripple formally settled its case with the Securities and Exchange Commission (SEC), paying a fine of around $125 million. Additionally, the regulatory environment has improved considerably over the past 12 months alone. Legislators in the U.S. seem much more willing to work with crypto companies to encourage responsible growth than they were in the past.

In all, conditions for Ripple have improved considerably in 2025. Its biggest roadblocks to growth -- industry skepticism and a marred reputation -- have eased significantly. With regulators increasingly onboard with Ripple's vision, we could finally see mass adoption in the years ahead. Just remember that most of Ripple's $300 billion market cap is still based on expectations, not actual traction. Gaining real-world adoption will be key for investors to profit long term.

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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy.