Current Adoption Reality - Who Actually Uses ODL?

RippleNet is Ripple's enterprise blockchain solution connecting financial institutions for cross-border payments.

Three product tiers historically (now consolidated but conceptually distinct):

• Messaging protocol for payment information

• Real-time tracking of traditional correspondent banking payments

• Settlement instructions and confirmation

• Does NOT use XRP

• Think: "Better SWIFT messaging"

• Uses XRP as bridge currency

• On-demand liquidity without nostro funding

• This is what we care about for XRP investment thesis

• Still represents small minority of RippleNet usage

• API for corporates to access RippleNet

• Simplified interface for non-banks

• Can use or not use XRP depending on underlying flow

Reality: Most RippleNet Partners Don't Use XRP

300+ RippleNet Partners (messaging)
    ↓
~100 exploring ODL (announced interest)
    ↓
~50 piloting ODL (small test volumes)
    ↓
~30 using ODL in limited production (some corridors)
    ↓
~15 using ODL at material scale (billions annually)

Conversion rate: 5% from partnership to material usage

1. Messaging alone solves their problem - Don't need liquidity service
2. Regulatory uncertainty - Crypto risk too high (especially pre-2023)
3. Insufficient volume - Their corridors don't justify ODL economics
4. Operational complexity - Too hard to implement
5. Waiting to see - Let others prove it first

These are the organizations with billions in annual ODL volume:

1. SBI Remit (Japan)

• Subsidiary of SBI Holdings (major Japanese financial conglomerate)

• Focus: Remittances from Japan to Asia

• Target market: Filipino, Vietnamese, Indonesian workers in Japan

• Corridors: Japan → Philippines, Vietnam, Indonesia

• Start Date: 2020 pilots, 2021+ production scale

• Current Status: Active and expanding

• Evidence:

• Japan → Philippines remittances: $2-3B annually (all providers)

• SBI market share: 15-25% estimated

• SBI ODL volume: $300-600M annually estimated

• As % of cross-border market: Tiny (0.0002%), but real

• High-volume corridor (millions of Filipinos in Japan)

• XRP liquidity exists in both JPY and PHP

• Japanese regulatory clarity (crypto-friendly)

• SBI owns crypto exchanges (vertical integration advantage)

• Compelling cost savings for customers

• ✅ Public statements from executives

• ✅ Mentioned in parent company filings

• ✅ Blockchain analytics show JPY/XRP and XRP/PHP volumes

• ✅ Partnership renewals (wouldn't continue if not working)

• ✅ Expanding corridors (signal of success)

Credibility: 10/10 - This is the gold standard proof point for ODL viability.

2. Tranglo (Malaysia/Singapore)

• Cross-border payments platform serving Southeast Asia

• Acquired by Ripple in 2023 (now subsidiary)

• Provides payment infrastructure to banks and money transfer operators

• Corridors: 20-25+ across Asia-Pacific, Middle East

• Start Date: 2021 pilots, 2022+ scaled production

• Current Status: Active, but now Ripple-owned

• Evidence:

• Exact figures undisclosed

• Likely $100-500M annually across all corridors

• Smaller per-corridor than SBI Remit but more corridors

• Multiple corridors create portfolio effect

• Southeast Asian regulatory environment favorable

• Existing payment infrastructure makes integration easier

• ✅ Ripple acquisition (expensive purchase = must have value)

• ✅ Continued operation post-acquisition

• ✅ Public case studies

• ⚠️ Now Ripple-owned, so less independent validation

Credibility: 7/10 - Real usage, but Ripple ownership reduces independence. Wouldn't have been acquired if not working, but less compelling as "independent validation."

These organizations use ODL but at smaller volumes or more recently:

• What: Consumer payments app in Middle East

• Corridors: MENA region remittances

• Status: Operational since ~2022

• Significance: First MENA ODL deployment

• Volume: Likely <$100M annually (small scale)

• Evidence: Public statements, Ripple press releases

• What: Brazilian financial institution

• Corridors: Latin America focus

• Status: Using ODL for some corridors

• Significance: Shows LatAm expansion

• Volume: Undisclosed, likely modest

• Evidence: Partnership announcements, Ripple mentions

• What: Currency exchange and remittance service

• Corridors: Australia → Asia primarily

• Status: Active user since ~2020

• Significance: Early adopter, sustained usage

• Volume: Small (FlashFX is boutique provider)

• Evidence: Public statements, continued partnership

• Multiple local Philippine payment companies

• Processing Japan → Philippines and other inbound remittances

• Volume: Individual small, collective moderate

• Names: Various, often unlisted entities

Total Tier 2: ~10-15 organizations with confirmed but limited ODL usage

Collective Volume Estimate: $100-300M annually

MoneyGram (2019-2021) - ENDED

• Largest, highest-profile partnership

• Required $62M subsidies over 2 years

• Peaked at 10% of US-Mexico volume (~$2-3B annually through ODL)

• Partnership ended March 2021 (SEC lawsuit uncertainty)

• Lessons:

• Various pilots that never scaled

• Announced partnerships with no production evidence

• Institutions that tested and discontinued

Institutions Often Misidentified as XRP Users:

• Status: RippleNet member, does NOT use XRP

• Product: xCurrent for One Pay FX

• Why Misleading: Often cited as "Ripple partner" implying XRP usage

• Reality: Messaging only

• Status: Tested RippleNet technology

• XRP Usage: Unclear, likely minimal or none

• Why Listed: Historical partnership announcement

• Status: RippleNet member

• XRP Usage: No evidence of production ODL

• Why Listed: Partnership announcement drove media coverage

• Many announced partnerships 2017-2019

• Little evidence of actual XRP usage in production

• May use messaging, not liquidity

Lesson: Always verify WHICH Ripple product a partner uses. "Ripple partnership" ≠ XRP usage.

Active Regions (Ranked by Volume):

1. Asia-Pacific (80%+ of ODL volume)

• High remittance volumes (large diaspora populations)

• Relatively crypto-friendly regulations (Japan, Singapore, Philippines)

• Less developed correspondent banking = more to gain from ODL

• SBI Holdings institutional push in region

• Multiple payment corridors with actual liquidity

• Japan → Philippines ★★★★★ (largest, most active)

• Japan → Vietnam ★★★★

• Japan → Indonesia ★★★

• Singapore → Various Southeast Asia ★★★

• Australia → Asia ★★

2. Middle East (10-15% estimated)

• Pyypl and other providers launching

• Large expatriate worker populations (remittances)

• Some countries (UAE) crypto-friendly

• Less developed traditional banking infrastructure

• UAE → Philippines ★★★

• UAE → India ★★

• Other Gulf → Asia ★★

Status: Early stage but promising

3. Latin America (5-10% estimated)

• US → Mexico was largest corridor via MoneyGram (ended 2021)

• Travelex Bank (Brazil) and others

• Limited scale

• Regulatory uncertainty in many countries

• MoneyGram exit created perception problem

• Stiff competition from traditional remittance services

Status: Struggling to regain momentum post-MoneyGram

4. North America/Europe (<5% estimated)

• Minimal ODL usage in US/Canada/Europe

• Mostly pilots, not production

• Bank of America and others have tested, not deployed

• Regulatory uncertainty (especially US during SEC lawsuit)

• Well-developed correspondent banking = less pain

• Institutional conservatism

• Stablecoins winning USD-based corridors

Status: Awaiting regulatory clarity and proof points

Key Insights:

• Not displacing efficient Western banking

• Succeeding in developing/emerging markets

• This limits TAM significantly

• Japan's clarity = adoption

• US uncertainty = avoidance

• Geography determines viability

• Asian institutions more willing to experiment

• Western banks extremely conservative

• This affects adoption timeline

• 80% concentrated in one region

• Not global adoption—regional success

• Scaling to West remains unproven

Typical ODL Adoption Journey:

• Press release: "[Bank X] joins RippleNet"
• Media coverage, XRP price spike
• Reality: Signed agreement to explore, nothing more
• Timeline: Day 1

Success Rate: 100% (all partnerships start here)

- Technical integration (API connections)
- Regulatory approval process
- Staff training
- Small test transactions
- Reality: Many drop out here

Success Rate: ~50% (half never move past testing)

• Limited corridor (1-2 currencies)
• Small volume ($1-10M monthly)
• Learning operational procedures
• Assessing economics
• Reality: If economics don't work, end here

Success Rate: ~50% (half of testers don't scale)

- Expanding corridors (3-5 currencies)
- Growing volume ($10-100M monthly)
- Still proving business case
- May still discontinue

Success Rate: ~60% (some still fail here)

• Multiple corridors operational
• Significant volume ($100M+ monthly)
• Integrated into core operations
• Unlikely to discontinue unless major issue

Success Rate: ~80% (at this point, usually sticky)

**Overall Funnel Conversion:**
100 partnerships → 50 testing → 25 piloting → 15 limited production → 10-12 at scale

Timeline: 3-5 years from announcement to meaningful operation

Estimated Distribution:

Stage 1 (Announced): 300+ institutions
Stage 2 (Testing): ~100 institutions
Stage 3 (Pilot): ~50 institutions
Stage 4 (Limited Production): ~30 institutions
Stage 5 (Material Scale): ~10-15 institutions

Active XRP Users: 30-50 (stages 3-5)
Significant Volume: 10-15 (stage 5)

What This Means:

• Vast majority still in early stages
• Only ~5% have reached meaningful operation
• 3-5 year timeline means 2019-2020 partnerships just now reaching maturity
• 2022-2024 partnerships won't mature until 2025-2029

Investment Implication:

• 2025: 15-20 institutions at material scale
• 2027: 25-35 institutions (if 2022 partnerships mature)
• 2030: 40-60 institutions (if funnel continues healthy)

This is slow, steady growth—not explosive adoption.

Top Reasons for Stalling:

• Cost savings aren't compelling enough

• Implementation costs too high relative to benefit

• MoneyGram subsidy reveals this was issue

• Crypto regulations unclear in jurisdiction

• Compliance department vetoes

• SEC lawsuit scared off US institutions 2020-2023

• Too hard to integrate

• Staff training inadequate

• Requires changes to processes

• Their corridors don't have XRP liquidity depth

• Spreads too wide

• Can't find market makers

• Institution focus shifts

• Budget cuts

• Internal politics

Key Lesson: Partnership announcement ≠ adoption. Most partnerships fail.

Result: Order of magnitude estimates, not precision
```

Conservative Estimate:

SBI Remit: $300-500M annually
Tranglo: $100-200M annually
Other Asia-Pacific: $100-200M annually
Middle East: $50-100M annually
Latin America: $50M annually
Total: $600-1,050M annually = $50-90M monthly

As % of $150T cross-border market: 0.0004-0.0007%
```

Optimistic Estimate:

SBI Remit: $800M annually
Tranglo: $400M annually
Other Asia-Pacific: $300M annually
Middle East: $150M annually
Latin America: $100M annually
Various undisclosed: $250M annually
Total: $2B annually = ~$170M monthly

As % of $150T market: 0.0013%
```

Realistic Middle:
$1B annually = ~$85M monthly

Historical (Estimated):

2019: $10-50M monthly (MoneyGram ramp)
2020: $50-150M monthly (MoneyGram peak)
2021: $30-80M monthly (MoneyGram ends, others growing)
2022: $40-90M monthly (steady recovery)
2023: $60-120M monthly (new corridors)
2024: $70-130M monthly (continued growth)
2025: $85M monthly (current estimate)

Pattern: Slow, lumpy growth dependent on individual institution ramps

Projection (IF Current Trajectory Continues):

2026: $100M monthly
2027: $120M monthly
2028: $140M monthly
2029: $170M monthly
2030: $200M monthly

2030 total: $2.4B annually
```

✅ SBI Remit operates ODL profitably at scale - Unsubsidized, sustained, billions annually
✅ 10-15 institutions using ODL materially - Confirmed through multiple sources
✅ Geographic concentration in Asia-Pacific - 80%+ of volume in one region
✅ Current volume ~$1B annually - Order of magnitude correct based on available data

⚠️ Exact volume figures - No comprehensive public reporting, must estimate
⚠️ Growth trajectory - Could accelerate or stagnate
⚠️ Western institutional adoption timing - Awaiting regulatory clarity
⚠️ Tranglo independence - Now Ripple-owned, less validation

❌ "300+ institutions using XRP" - Actually dozens at most
❌ "Global adoption" - Actually Asia-Pacific regional success
❌ "Proven at scale" - Actually niche remittance corridors
❌ "Rapid growth" - Actually slow, steady, institutional timelines

ODL has real but limited current adoption:

• Technology works commercially (SBI Remit)

• Can be profitable without subsidies

• Solves real pain points in specific corridors

• 10-15 institutions using meaningfully (not 300)

• ~$1B annual volume (0.0007% of cross-border market)

• Concentrated in Asia-Pacific remittances

• Minimal Western institutional penetration

• Slow growth (not explosive)

This is early-stage success, not mainstream adoption. The technology has proven viability, but scale remains distant goal.

Current trajectory: 10-15% annual growth

This is 15+ year journey, not 3-5 years.

• Major Western bank adoption (JPMorgan, HSBC scale)
• Regulatory clarity enabling US/EU institutions
• Competitive pressure forcing adoption
• Financial crisis exposing correspondent banking weakness

Without catalysts: Slow, steady, niche growth

Key Takeaway for Investors:

• Current adoption is tiny (0.0007% of market)
• Growth is slow (institutional banking moves glacially)
• Scale-up will take decade+, not years
• Many "ifs" must align for base/bull cases

This is long-term speculative position, not near-term catalyst.

Appropriate position sizing: 3-8% of portfolio for patient investors who can wait 5-15 years. Not appropriate for those needing 1-3 year returns.

Assignment: Build a comprehensive tracking system to monitor real ODL adoption.

Requirements:

Part 1: Partnership Database (Spreadsheet)

• Institution Name

• Announced Date

• Country/Region

• RippleNet Product (Messaging/ODL/Both)

• Current Stage (Announced/Testing/Pilot/Production/Scale)

• Evidence of XRP Usage (Public statements/Filings/Blockchain/None)

• Estimated Volume (if available)

• Last Update Date

• Notes

• All "Tier 1" users from this lesson

• At least 20 additional RippleNet partners researched

• Classify each accurately (messaging vs ODL)

Part 2: Volume Estimation Dashboard

• Known volumes (SBI Remit, historical MoneyGram)
• Estimated volumes by tier
• Growth rate calculations
• Scenario projections (conservative/base/optimistic)
• Chart showing historical and projected growth

Part 3: Geographic Heat Map

• Corridors by volume (estimated)
• Color-coded by activity level
• Regional totals
• Identify white spaces (opportunities)

Part 4: Verification Methodology Document

• How to verify if institution uses XRP vs just RippleNet
• Sources to check (websites, filings, news)
• Red flags for false positives
• Blockchain analysis basics
• Your verification process

Part 5: Monthly Monitoring Plan

• Sources to check monthly (Ripple blog, exchange volumes, news)

• Metrics to track (new partnerships, volume estimates)

• Decision triggers (when to update your investment thesis)

• Accuracy of classification (25%) - Did you correctly identify ODL vs messaging?

• Research depth (25%) - How thorough was your verification?

• Analytical quality (25%) - Good volume estimates and projections?

• Usability (15%) - Could someone else use your tracker?

• Verification methodology (10%) - Teach others your process?

Time investment: 5-6 hours
Value: Living document you update monthly to track real adoption

For Next Lesson:
Research reasons why banks haven't adopted ODL—we'll examine barriers preventing mainstream adoption despite proven technology (Lesson 5: Why Institutions Haven't Adopted ODL Yet).

End of Lesson 4

Total words: ~7,800
Estimated completion time: 50 minutes reading + 5-6 hours for deliverable