Ripple (XRP) and Stellar Lumens (XLM) are both cryptocurrencies designed to facilitate online payments and transactions. XRP is primarily used by major financial institutions like banks for interbank settlements and is also backed by the centralized company Ripple. XLM is a decentralized cryptocurrency that provides financial aid to individuals and small businesses. 

What is Ripple (XRP)

Ripple (XRP) is a cryptocurrency and a payment protocol designed by Ripple Labs, an American tech company. Ripple is fast and provides secure, low-cost cross-border payment solutions to financial institutions across the globe. Ripple aims to replace the traditional payment systems, which are often slow, expensive, and unreliable. Blockchain technology used in Ripple’s payment protocol enables instant, secure, and low-cost transactions between centralized institutions like banks. 

XRP can not be mined or created through a cryptographic process. The entire supply of XRP (100 billion) was created at the time of Ripple’s payment network. 

The XRP token allows Banks and other financial institutions to convert fiat currency into XRP quickly and with a low fee before sending it to its destination. XRP facilitates the transfer of assets across many countries without needing the aid of any intermediaries or centralized authorities.

What is Stellar Lumens (XLM)

Stellar Lumens was a project launched in 2014 by Jed McCaleb, one of the co-founders of Ripple, and Joyce Kim, an attorney and entrepreneur. It is a decentralized platform designed to facilitate international payments. Lumens (XLM) is the native cryptocurrency of the Stellar network, an open-source, decentralized blockchain protocol that facilitates fast, low-cost international payments and financial transactions. 

Stellar acts as an intermediary currency or asset to facilitate secure and fast cross-currency transfers, even between assets that lack a direct trading pair. Suppose you are sending US Dollars (USD) could result in the recipient receiving Euros (EUR), with XLM briefly serving as a conversion link.

Each transaction on the Stellar network requires a small fee of 0.00001 XLM. This prevents spam attacks and ensures network efficiency. To maintain an account on the Stellar network, users must also hold a minimum balance of XLM. This also helps in preventing ledger spams.

XLM vs XRP 

• Jed McCaleb was involved in the creation of both XRP and XLM.
• Both Ripple and Stellar are designed with the same goal in mind: to facilitate cross-border transactions while focusing on making the entire process fast, secure, and cheap for institutions and individuals anywhere in the world.
• Both XRP and XLM have formed alliances with tech companies and financial institutions to promote the use of their platform.

Difference Between XLM & XRP

XLM and XRP are both cryptocurrency platforms designed for fast, low-cost, cross-border payments, but they differ in terms of target audience, organizational structure, and level of decentralization.

1. Organization: XRP is backed by the private company Ripple Labs. XLM is run by Stellar Development Foundation, a non-profit organization.
2. Mission: XRP aims to serve the needs of financial institutions, while XLM aims to serve the needs of individuals.
3. Decentralization: XRP is a centralized cryptocurrency due to Ripple Labs’ control over a large portion of the token supply. XLM, however, is more decentralized due to its open-source code and consensus mechanism that allows any user to validate transactions.
4. Total supply: XRP has a total supply of 100 billion tokens, and transaction fees are burned or permanently removed from circulation. XLM supply was reduced to 50 billion in 2019 and is now fixed.
5. Token Distribution: XRP’s entire supply of tokens was created at the time of the launch of the Ripple payment network, while XLM has been released gradually through various means such as airdrops and Initial coin offerings (ICOs).

Current state of XRP and XLM

Ripple and its ongoing court battle with the Securities and Exchange Commission have been going on since December 2020. The company and its two executive’s Brad Garlinghouse and Chris Larsen, are being sued for $1.3 billion of unregistered securities. The results of this lawsuit will determine the future of XRP. If the court ruled in favor of the SEC’s XRP would leave the US market’s which is 25% of Ripple’s business, so losing would be a major company downfall.

Stellar Lumen has a clean slate as they managed to stay clear of any regulatory concerns. Stellar even managed to get regulatory approval from the New York Department of Financial Services.

Which to buy, XRP or XLM?

By looking at the market capitalization and capital raised, Ripple looks like a very promising investment. It has a well-established network and is backed by Ripple Labs, a company that has connections to financial institutions all over the world.

The court ruled in favor of Ripple Labs in August 2025, with the company having to pay a fine of $125 million. Since the XRP is growing at a nice pace, its chances of reaching a $100 price are very high. If you are willing to risk it, then this is a perfect time to buy XRP tokens.

Stellar Lumens, on the other hand, will be a long-term investment as its growth is slow and smoother. XLM might be a better investment than XRP if you are willing to wait for the return of your investment. When Ripple was facing the SEC lawsuit, Stellar Lumens partnered up with VISA, Tala, and Circle, and this collaboration made XLM price go up by 13.4% on the day of announcement. It can reach a $1 price in the near future.

This is not financial advice, and always do your own research when you want to make a decision on what you invest in.

Conclusion 

XRP and XLM are both currencies that compete in the same field, each with its own unique characteristics and use cases. XRP’s role is to bridge fiat currencies and settle cross-border payments quickly and efficiently. XLM, on the other hand, focuses on providing individuals with the services they need for easy peer-to-peer transactions. Both tokens have real-world utility and strong partnerships and continue to grow in their respective fields.

FAQs

Yes, XLM can reach $1.

Lumen (XLM) tokens are used on the Stellar network to pay the very low transaction fees in order to prevent spam attacks.

Stellar does not have any form of mining or staking.

XRP has a fixed supply of 100 billion tokens, making it deflationary.

Stellar – Stellar is a blockchain that makes payments easier by enabling its users to create, send, and trade digital representations of all forms of money, from fiat currencies like dollars and euros to cryptocurrencies like bitcoin. It aims to bring the world financial system together on a single network.