XRP is "Unholdable for Banks "
XRP is often described as “unholdable” for banks because its design and regulatory position conflict with how traditional banking institutions operate. Banks prioritize stability, legal clarity, and full regulatory compliance, while XRP remains closely tied to market volatility and unresolved legal interpretations in several jurisdictions. Holding XRP on balance sheets exposes banks to price fluctuations that clash with strict capital requirements and risk management rules.
Additionally, banks are not structured to hold speculative digital assets. They function as custodians and intermediaries, not traders. XRP’s value can change rapidly, making it unsuitable as a reserve asset for institutions that must maintain predictable liquidity. Regulatory uncertainty surrounding whether XRP is classified as a security further discourages long-term holding, as banks cannot risk retroactive compliance violations.
Instead, banks may use XRP only as a transient bridge asset—if at all—moving in and out of it within seconds to facilitate cross-border settlements. This avoids exposure while still leveraging speed and cost efficiency. Until XRP achieves global regulatory clarity, price stability, and institutional-grade risk controls, it remains impractical for banks to hold, even if its underlying technology offers potential transactional benefits.
