What are XRP Tokens

[Kakashi2020]

XRP – which is the actual cryptocurrency – is a token which is used on the Ripple network to facilitate transfers of money between different currencies. Existing settlement systems generally use US dollars as a common currency for converting between other currencies. This incurs currency exchange fees and takes time – which is why bank transfers between accounts in different countries often take up to three days to process.
By first converting the value of the transfer into XRP, rather than USD, exchange fees are eliminated and processing of payments is reduced to seconds.

Banks including Fidor Bank, Santander, the Commonwealth Bank of Australia and a consortium of 61 Japanese banks have all said that they are trialing or implementing applications utilizing the Ripple Network payment system.

XRP is a token used for representing transfer of value across the Ripple Network. Different to bitcoin, where new coins are created (up the a capped level) as rewards for participants offering computing power to maintain the blockchain network, Ripple created 100 billion XRP coins at its inception.

Ripple recently added a new feature whereby, through a smart contract system (escrows), the company releases 1 billion of its XRP holding to themselves each month to help fund business operations, incentivize customers, and sell to accredited investors. Any unused tokens will be placed back into escrow. According to internal sources, last month (which was the first month of escrow) Ripple only used approximately 100 million and put 900 million back into escrow.