On-Demand Liquidity (ODL) is a cross-border payment product from Ripple that uses XRP as a bridge currency, so financial institutions do not have to pre-fund accounts in destination currencies. Since September 2023, Ripple has marketed the same service under the name Ripple Payments, though “ODL” remains the term most people in the XRP and payments communities still use.
Traditional international wires rely on Nostro and Vostro accounts: pre-funded accounts that banks hold with foreign correspondents in destination currencies. That arrangement locks up very large amounts of idle capital worldwide. ODL replaces those reserves with a real-time intermediary. The sending institution converts local currency to XRP, XRP moves across the XRP Ledger in seconds, and the receiving institution converts XRP into the destination currency.
Ripple positions ODL as an answer to the cost and delay of correspondent banking. Wire transfers over the SWIFT network commonly take one to five business days and can cost $20 to $50 per transfer in bank fees, plus the cost of capital tied up in reserves. ODL settles in seconds and removes most of the reserve requirement. Ripple has described ODL corridors as live in more than 55 countries, with named partners including SBI Remit, Tranglo, and Pyypl. MoneyGram, once ODL’s best-known customer, wound down its partnership with Ripple in March 2021, so it should not be listed as a current user.
Where Did ODL Come From?
- 2012: Ripple’s predecessor OpenCoin launches the XRP Ledger, with XRP designed as a bridge asset for institutional payments
- 2018: Ripple launches xRapid, the XRP-based liquidity product that preceded ODL
- July 2019: MoneyGram and Ripple announce a strategic partnership, and MoneyGram begins using xRapid for corridors including Mexico and the Philippines
- October 2019: Ripple renames xRapid to On-Demand Liquidity as part of a wider RippleNet rebrand, describing it as a rename of an existing product rather than a new one
- December 2020: The SEC sues Ripple, alleging XRP was sold as an unregistered security
- March 2021: Ripple and MoneyGram wind down their partnership, after MoneyGram had already stopped using the XRP-based product in February, citing legal uncertainty
- 2021 to 2023: ODL volume grows from roughly $53 million in 2021 to roughly $970 million in 2022 and about $2 billion in the first half of 2023, according to figures Ripple shared publicly
- July 2023: A U.S. court rules that programmatic sales of XRP on exchanges were not securities offerings
- September 2023: Ripple rebrands ODL as Ripple Payments on its website, saying the service itself is unchanged
- Late 2024: Ripple launches RLUSD, a U.S. dollar-backed stablecoin, as a lower-volatility option alongside XRP for institutional payments
- 2024 to 2025: The court sets a $125 million penalty in August 2024. In March 2025 the SEC moves to drop its appeal, and in August 2025 both sides’ appeals are formally dismissed, closing the case
How Does ODL Work?
ODL moves value in three steps. A sending institution buys XRP with local currency on an exchange in the source country. The XRP is sent across the XRP Ledger, where ledgers close in roughly three to five seconds. A receiving institution sells that XRP for the destination currency on an exchange in the destination country and pays out locally. Because XRP is held only for the seconds between the buy and the sell, the institution does not need to hold XRP as an investment.
| Feature | SWIFT Wire | ODL (XRP) | Stablecoin Transfer | Bitcoin |
|---|---|---|---|---|
| Settlement time | Typically 1 to 5 days | Seconds | Seconds to minutes, chain dependent | Roughly 10 to 60 minutes |
| Typical cost | $20 to $50 in bank fees | Cents, plus exchange spreads | Cents to a few dollars | Varies with network congestion |
| Pre-funded reserves needed | Yes | No | No | No |
| Intermediaries | Several correspondent banks | Exchanges and liquidity providers | Exchanges or on-ramps | Exchanges or on-ramps |
| Regulation | Fully regulated | Evolving, varies by corridor | Varies | Varies |
ODL in Simple Terms
- Bridge currency: XRP is the middle step. Local currency goes in, XRP crosses the ledger, and local currency comes out on the other side
- No pre-funding: Banks usually park large balances abroad to cover outgoing transfers. ODL is designed to free that capital for other uses
- Near-instant settlement: A payment that takes days through correspondent banks can settle in seconds, which matters most for remittances
- Ripple’s commercial product: ODL is a commercial service built on the open XRP Ledger. The ledger is open source and decentralized, while ODL adds Ripple’s connectivity, compliance tooling, and support
- RLUSD: Ripple’s stablecoin gives institutions a lower-volatility alternative for treasury and payment flows that do not need XRP as the bridge
What Are Real-World Examples of ODL?
| Scenario | Implementation | Outcome |
|---|---|---|
| MoneyGram, U.S. to Mexico and the Philippines (2019 to 2021) | MoneyGram used ODL to settle foreign exchange legs through XRP | Showed the model working at scale before the partnership ended in March 2021 |
| SBI Remit, Japan to the Philippines | SBI Remit converts yen to XRP, moves it across the XRPL, and pays out pesos | Settlement in seconds instead of days, with lower costs than correspondent banking |
| Tranglo, Southeast Asia | Tranglo, in which Ripple holds a stake, uses ODL for multi-corridor payouts | Real-time settlement across several Asian corridors |
| Australia corridor | Australian payment providers used ODL to settle AUD flows | One of the early non-U.S. corridors, live from 2019 |
What Are the Advantages of ODL?
| Advantage | Details |
|---|---|
| Capital efficiency | Removes much of the Nostro and Vostro pre-funding requirement |
| Speed | Seconds instead of days for international settlement |
| Cost reduction | Often cheaper than a correspondent banking wire, especially on high-volume corridors |
| Corridor coverage | Ripple has described activity in more than 55 countries |
| Neutral bridge asset | XRP provides a liquid intermediary between pairs that have thin direct markets |
What Are the Risks of ODL?
| Risk | Details |
|---|---|
| XRP price volatility | XRP is held only briefly, but a sharp move during settlement creates a small FX risk |
| Regulatory differences | The U.S. case is closed, but XRP’s treatment still varies by jurisdiction |
| Ripple dependency | ODL is Ripple’s proprietary product, so users depend on Ripple’s infrastructure and partners |
| Exchange liquidity | ODL needs deep XRP liquidity on exchanges in both the source and destination country |
| Stablecoin competition | USDC, USDT, and Ripple’s own RLUSD offer similar speed without XRP price exposure |
Risk management tips:
- Check the regulatory position of XRP and ODL in each corridor before building a payment process around it
- Remember that XRP exposure usually lasts only seconds, so FX risk is small but not zero
- Compare ODL against stablecoin-based routes for each specific corridor
Frequently Asked Questions About ODL
Q: Does ODL require holding XRP as an investment? No. ODL uses XRP as a pass-through asset for seconds. The sending side converts into XRP and the receiving side converts out immediately, so no long-term holding is required.
Q: Is ODL the same as the XRP Ledger? No. The XRP Ledger is the open-source, decentralized blockchain XRP runs on. ODL is Ripple’s commercial product built on top of it, with added connectivity, compliance, and support services.
Q: Is ODL still called ODL? Ripple moved the product under the Ripple Payments name in September 2023 and said the service itself did not change. Many people still call it ODL.
Q: How is ODL different from SWIFT? SWIFT is a messaging network. Money still moves through correspondent banks that hold pre-funded accounts, which is why settlement can take days. ODL moves value itself through XRP, without pre-funded accounts.
Q: What happened with the SEC v. Ripple case? The SEC sued Ripple in December 2020. In July 2023 a federal judge ruled that programmatic XRP sales on exchanges were not securities offerings, while direct institutional sales were. In August 2024 the court set a $125 million penalty. The SEC moved to drop its appeal in March 2025, and in August 2025 the Second Circuit approved the joint dismissal of both sides’ appeals, which ended the case.
Q: Can stablecoins do what ODL does? Conceptually yes. USDC or USDT can move across blockchains in seconds for small fees. ODL adds Ripple’s institutional connectivity, compliance tools, and automated FX conversion, which most stablecoin transfers do not include by default.
Related Terms
- XRP: The digital asset ODL uses as its bridge currency
- XRP Ledger (XRPL): The open-source blockchain on which XRP and ODL settlements run
- Nostro and Vostro Accounts: Pre-funded foreign currency accounts that banks hold with correspondents
- Correspondent Banking: The chain of intermediary banks used by traditional international wires
- Ripple Payments: Ripple’s current name for its ODL-based cross-border payment service
- RLUSD: Ripple’s U.S. dollar-backed stablecoin
