- A proposed XRP Ledger amendment, XLS-68, would let a bank or app pay another user’s account reserve and transaction fees while that user keeps control of their own keys.
- It has not been enabled. Amendments on the XRP Ledger need sustained support from before they go live, and this one is still a proposal.
- If it does go live, the XRP that end users currently have to hold would sit on company balance sheets instead. That is a shift in who holds, not a change in what the ledger charges.
There is a small, slightly awkward fact about the XRP Ledger that rarely makes it into the headlines: to use it at all, you have to own some XRP first. Not as an investment. As a deposit. A proposed upgrade would let somebody else cover that for you.
If a bank or a payments app ever offers you something built on the XRP Ledger, this is the change that decides whether you need to go and buy XRP before you can use it. Right now you would. Under this proposal you wouldn’t, because the company would hold it on your behalf.
The second half matters if you own XRP yourself. The demand that comes from millions of individual accounts each locking away a small amount would become demand from a much smaller number of companies locking away larger amounts. Whether that adds up to more or less is genuinely unsettled, and anybody telling you otherwise is guessing.
Why an XRP Ledger account costs money to open
Most charge you to send a transaction. The XRP Ledger does that too, but it also charges you to exist on it.
Every account on the ledger has to keep a minimum amount of XRP locked in place, called the base reserve. You still own it, but you cannot spend it while the account is open. The figure has been 1 XRP since a validator vote in late 2024, down from 10 before that. Certain things you can do on the ledger, holding an issued , placing an order on its built-in exchange, add a small extra reserve on top, known as an owner reserve.
The purpose is housekeeping rather than revenue. Every account has to be stored by every server running the network, forever. Without a cost attached, anyone could create millions of empty accounts and bloat the ledger for nothing. Making each one cost something makes that expensive.
Transaction fees work differently again. They are tiny, a fraction of a penny in normal conditions, and they are not paid to anyone. The XRP is destroyed. It leaves the supply permanently. That is where the frequently repeated line about XRP being deflationary comes from, though the amounts involved are small enough that the effect is close to invisible at current usage.
What the amendment would actually do
The Sponsor amendment, built on a specification called XLS-68 Sponsored Fees and Reserves, would let one account pay those costs for another. A bank, an issuer or a consumer app could act as the sponsor, covering the reserve and the fees for its customers.
The customer keeps their own account and their own . Nothing about control changes. What changes is who funds the plumbing. Jazzi Cooper, head of product at Ripple, described the feature as letting a sponsor such as a bank, issuer or platform cover those costs on behalf of users, according to CryptoSlate’s write-up.
For a company building a product, that removes an onboarding step that has been a genuine obstacle. Telling a customer they must first buy a small amount of a volatile asset before they can receive a bond or make a payment is the kind of friction that kills a product in a compliance review, never mind in the app store.
The word doing all the work is “could”
This has not happened. It is a proposed amendment, and amendments to the XRP Ledger only take effect once validators, the servers that agree on the state of the ledger, have backed them with a large majority sustained over a period of time. Some proposals sit unenabled for years. Some never make it.
We have not seen a primary source on this. There is no Ripple announcement or XRPL Foundation post in front of us, and our account rests on CryptoSlate’s reporting of Cooper’s comments. Treat the specifics, and particularly any timeline, as second-hand until the ledger’s own amendment status page shows the vote.
The framing in the coverage is worth separating out too. “Could concentrate XRP ownership inside banks” is a projection about what happens if a proposed feature is adopted and then widely used by institutions that have not committed to using it. Each of those steps is a real question.
Other networks have already tried this
Fee abstraction is not a new idea, which is useful, because it means there is evidence rather than just argument.
Solana has had fee payers for years: one account signs and funds a transaction on behalf of another, and consumer apps use it routinely so that new users are not stopped at the door by a wallet with nothing in it. Ethereum went further with account abstraction, where a paymaster contract can settle gas costs for a user, sometimes in a different token entirely. Polygon and several other networks have run similar schemes.
On none of those networks did hiding the fee from the end user cause the underlying token to stop being needed. The fee still has to be paid, in the native token, by somebody. What changed was who paid it and how visible it was. Usage of the applications generally went up, because the first-run experience stopped being a shopping trip.
That is an argument by analogy rather than proof, and the XRP Ledger differs in one meaningful way: the reserve. A fee is a one-off cost. A reserve is capital locked up for as long as the account exists. A sponsor supporting a million customers would be locking away a million XRP at the current base rate, plus whatever owner reserves those accounts trigger. That is a balance-sheet commitment, not a running cost, and finance departments treat the two very differently.
Our inference, labelled as one
Nobody can tell you yet whether this is net positive or net negative for XRP demand, and we are not going to pretend we can. What we would say is that the two effects pull in opposite directions and are not the same size.
Fewer individual wallets needing to hold XRP is a broad, shallow reduction. More institutions holding pooled reserves on behalf of customers is a narrow, deep increase, but only to the extent institutions actually build on the ledger, which is the assumption the whole story rests on. If they don’t build, the amendment removes friction nobody was experiencing.
The other consequence is harder to quantify. Concentrating reserves among a handful of sponsors makes the ledger’s activity more dependent on a smaller number of commercial decisions. That is the ordinary trade-off of any system that makes itself easier to use by putting an intermediary in the middle, and it is worth naming rather than treating as a detail.
What to watch
Whether the Sponsor amendment reaches a validator vote at all, and if it does, how quickly support builds. The XRP Ledger publishes amendment status openly, so this is checkable rather than a matter of speculation.
After that, whether any named institution says it intends to use the feature. A specification that enables bank products is not the same as a bank product. Until somebody announces one, the entire case for this mattering runs on a possibility.
And next time you see a headline about ownership concentrating in banks, check whether the change it describes has actually been switched on. On this one, it hasn’t.