Ripple Labs is doubling down on its presence in Japan, drawing on longstanding relationships with the country’s traditional financial institutions. The strategy is aimed at increasing adoption and interest in the XRP Ledger (XRPL).

This week, Asia Web3 Alliance Japan and Web3 Salon launched the Japan Financial Infrastructure Innovation Program. The initiative is designed to support Japanese startups developing next-generation, compliant digital financial solutions on the XRP Ledger.

Ripple’s Japan Strategy Tests Whether Institutions Can Lift XRP

The program opened applications on December 19 and is offering a $10,000 grant per startup. It is narrowly focused on three high-value verticals, including stablecoins, real-world asset tokenization, and credit infrastructure.

“Japan offers an overwhelming opportunity for blockchain innovation, supported by a forward-thinking regulatory framework and deep talent pool. This program represents Ripple’s commitment to fostering a vibrant ecosystem where startups can leverage the speed, low cost, and reliability of the XRP Ledger to create real-world benefits and transform financial infrastructure,” Christina Chan, Senior Director of Developer Growth at RippleX, said.

Analysts view it as a low-cost funnel for identifying candidates for Ripple’s significantly larger capital pool, including the 1 billion XRP fund dedicated to developers in Japan and Korea.

The program has secured backing from a formidable roster of establishment players, including Mizuho Bank, SMBC Nikko Securities, and Securitize Japan.

Despite the initiative’s high-profile corporate backing, it comes at a precarious moment for the network. While Ripple touts institutional adoption, the underlying usage of the XRPL tells a conflicting story of contraction.

According to data from DefiLlama, the Total Value Locked (TVL) on the XRPL has plummeted in recent months. The TVL has fallen from a July high of $120 million to roughly $62 million as of press time.

This nearly 50% drawdown suggests that capital is exiting the network’s DeFi protocols even as corporate partnerships expand.

Meanwhile, the broader crypto market downturn likely contributed to the drawdown, as Bitcoin has fallen 30% from its October high of more than $126,000.

Furthermore, the push into asset tokenization faces stiff competition. According to Rwa.xyz, XRPL currently ranks ninth globally in tokenized assets, with approximately $213 million in assets.

While substantial, this lags significantly behind networks like Ethereum and newer competitors that have captured the lion’s share of the RWA market.

Considering this, the JFIIP program is more than a startup accelerator. By entrenching itself in Japan’s banking infrastructure, Ripple hopes to create a sticky ecosystem that is immune to the speculative volatility of the broader crypto market.