Banks May Absorb XRP Costs Under Proposed XRPL Upgrade

A proposed XRP Ledger (XRPL) upgrade could change how banks and financial institutions interact with the token. According to Ripple, the update would allow companies to absorb XRP costs on behalf of their customers, effectively removing the need for individuals to manage the token themselves.

Jazzi Cooper, Ripple's head of product, explained that the feature is designed so a sponsor like a bank or platform can cover costs such as account reserves and transaction fees for users. This would enable consumer-facing applications and institutional platforms to keep the underlying XRP mechanics out of the customer experience.

However, this new structure could concentrate XRP ownership among a smaller group of institutional sponsors rather than individual retail wallets. A business sponsoring 1,000 customers, for example, would carry roughly 1,000 XRP of additional base-reserve requirements alongside its own reserve.

The proposal remains some distance from activation, with only six validators supporting the amendment as of press time and no scheduled activation date.