Investing should never feel like choosing between two nearly identical breakfast cereals. Yet, correctly or not, many people see XRP (XRP -2.16%) and Stellar (XLM -2.54%) as flavor twins because both sprang from blockchain technology and court the same cross-border payments banks, payment processors, and other similar institutions.
But when capital, compliance, and catalysts matter for developing an investment thesis, as they do in today's maturing crypto market, XRP overtly outmuscles Stellar. Here are three reasons the ledger behind Ripple's coin still holds the upper hand in this matchup.
Image source: Getty Images.
1. Deeper liquidity
Financial institutions have a lot of money, and that money needs wide doors to transit, or else it won't be worth the effort of moving anything at all.
On that front, XRP's circulating market cap is roughly $194 billion, with about $12 billion in daily trading volume. In contrast, Stellar's market cap hovers near $14 billion, and it turns over only about $1 billion in volume per day.
That extra breadth with XRP does three things for investors. First, it makes it easier to accumulate or exit large positions without facing adverse price movements. Second, it signals to institutions that counterparties will almost always be available. Third, it supports more-sophisticated secondary products, which include everything from derivatives to structured notes, because market makers can hedge effectively.
Liquidity begets liquidity, and XRP's lead here is likely to widen as its ecosystem grows, attracting even more institutional capital.
2. Its compliance tool kit is better
Payment networks exist only as long as they maintain good standing with regulators.
The XRP ledger (XRPL) has built-in features such as trust-line authorization, account freezes, and even deep-freeze tools that let asset issuers shutter suspicious wallets at the protocol level. Those controls let banks tick their know-your-customer and anti-money laundering boxes without cobbling together workarounds.
Stellar can enforce similar rules, but it has more-heavy reliance with on- and off-ramp providers to run separate compliance servers and manage revocations. That architecture is fine for boutique issuers, but heavyweight custodians prefer fewer moving parts and fewer third parties to interact with.
The difference shows up in partner rosters. Ripple's 2025 deal with HSBC Holdings to launch tokenized securities custody put the bank's compliance staff directly inside XRPL's guardrails, not outside them. Add in Circle Internet Group's decision to launch its stablecoin on XRPL this June -- instantly boosting on-chain liquidity for regulated dollar transfers -- and the ledger now looks tailor-made for institutions that cannot afford compliance missteps.
Stellar's partnerships, while including widely known players like Moneygram International, on the whole don't approach the same scale or liquidity potential.
3. Clearer upcoming catalysts
Lastly, XRP enjoys a pipeline of headline catalysts that Stellar lacks.
Analysts now assign a 95% probability of a spot XRP exchange-traded fund (ETF) winning approval from regulators in the U.S. before the close of 2025. Stellar is absent from that short list. An ETF matters because asset issuers must back their funds with real coins, and advisors can funnel retirement dollars into the asset at the click of a mouse.
Meanwhile, XRPL's value of tokenized real-world assets (RWAs) just topped $179 million, marking a 52% jump in the last 30 days, all thanks to its institutional pilot programs ranging from on-chain U.S. Treasury bills to tokenized bonds.
Stellar's RWA footprint is larger, at $451 million, but it simply isn't getting as much attention, and over the last 30 days its value was flat. Momentum, not absolute size, attracts fresh capital, and XRP's acceleration is the one grabbing headlines, which is why it's a better purchase at the moment.
Put ETF tailwinds together with Ripple's expanding stablecoin and custody partnerships, and XRP's flywheel looks primed. Stellar, still focused on remittances and consumer payments, simply lacks comparable sparks for now.
