Banks Could Become Primary Holders of XRP Under Proposed Ledger Upgrade

A proposed upgrade to the XRP Ledger (XRPL) could make it easier for banks and financial institutions to absorb XRP costs, allowing customers to use tokenized assets without holding the token themselves.

The Sponsor amendment, based on the XLS-68 Sponsored Fees and Reserves proposal, would enable a company to pay account reserves and transaction fees for another XRPL user while that customer retains control of their account and private keys.

Jazzi Cooper, Ripple's head of product, said the feature is designed so a sponsor such as a bank or platform can cover those costs on behalf of users.

Under current parameters, a business sponsoring 1,000 otherwise empty customer accounts would carry roughly 1,000 XRP of additional base-reserve requirements alongside its own reserve. This could become significant if banks deploy XRPL products to millions of customers.