How does Ripple's On-Demand Liquidity (ODL) use XRP?

The full answer

What does Ripple’s documentation say ODL does with XRP?

Ripple’s product documentation, read in September 2026, describes On-Demand Liquidity (ODL) as a liquidity management solution for RippleNet that lets customers move money across borders and currencies “without needing to pre-fund in any market” [1]. The same page says ODL uses XRP as a bridge currency, sourcing liquidity on demand and moving funds in real time [1]. Ripple lists upfront visibility of fees, end-to-end payment status, and automatic payout from certain exchanges to the beneficiary’s bank account among ODL’s features [1]. Ripple also says ODL reduces operational costs and frees up working capital [1]. That is the company’s own claim; whether it holds against other options is covered on Is using XRP for cross-border payments actually cheaper?.

The documentation names three kinds of user: payment service providers sending remittances between family and friends, fintechs processing business-to-business payments for small and medium enterprises, and companies moving internal treasury payments to accounts in foreign countries [2]. The case for why prefunding is a cost at all is weighed on Is the cross-border prefunding problem real, or Ripple marketing?.

How does a single ODL payment with XRP work?

Ripple’s use-case page sets out the individual-payment flow in these steps [2]:

1. Ripple deposits XRP into the sender’s designated wallet.
2. The sender retrieves and accepts a quote through the RippleNet API.
3. RippleNet transfers XRP from the sender’s wallet to the receiver’s wallet.
4. The receiver pays out fiat currency to the beneficiary and liquidates the XRP for fiat.
5. Ripple invoices the sender for initiated payments in aggregate.

Ripple says this flow covers remittances and B2B payments, with the receiver making payouts to end beneficiaries in receive markets [2]. The API documentation refers to a source digital asset exchange or wallet at the start and a destination exchange where the payment can terminate [3]. Which exchanges fill those roles is covered on Which exchanges provide XRP liquidity for Ripple’s ODL?.

The XRP in this flow comes from Ripple, and the sender settles with Ripple afterwards by aggregate invoice, so the documented flow does not show the sender buying XRP on the market before each payment.

What are the three ways ODL settles with XRP?

The first mode is the individual payment described above [2].

The second is bulk funding. Ripple describes it as instantly topping up the sender’s position with a receiver, and its example is a remittance company pre-funding its position with an aggregator for offshore payouts [2]. Ripple funds the sender wallet with XRP, which is sent to the receiver; the receiver converts it to fiat and funds the sender’s account at the receiver [2]. The sender then sends payment instructions through RippleNet, and the receiver disburses funds to beneficiaries from that funded account [2].

The third is internal treasury: intra-company transactions for customers with accounts in a foreign country [2]. Ripple funds the customer’s wallet with XRP, the customer liquidates it to the destination currency, and the customer transfers that currency from the wallet to a local bank account [2]. This is the documented answer to whether a company can use XRP to move its own funds abroad.

In bulk funding, XRP tops up a position that Ripple’s own example calls pre-funding. In that mode ODL speeds up funding of an offshore position; it does not remove the position. The product page’s “without needing to pre-fund” wording fits the individual-payment mode more exactly.

How does Ripple’s API tell a payment to use XRP?

Ripple’s API documentation describes a boolean field, digital_asset_origination, that tells RippleNet to use ODL to originate the payment in XRP from the source digital asset exchange or wallet [3]. When the flag is set, the quote shows 0 for FX trading fees on the source exchange trade, and at settlement ODL skips that trade and executes the payment using XRP from the sender’s ODL wallet or exchange account [3]. The feature requires RippleNet 4.6.0 or higher [3]. How Ripple’s wider system chooses between XRP and other routes is covered on How does Ripple’s payment system decide whether to route a payment through XRP?.

What does an ODL payment cost the customer, and who earns the spread?

Ripple’s interface documentation shows a quote with four lines: the fee Ripple charges for the payment, the rate at which the sending currency (USD) is exchanged for XRP, the rate at which XRP is exchanged for the payout currency (EUR), and a guaranteed end-to-end USD-to-EUR rate that factors in fees and interim rates [4]. The quote expires after one hour [4]. The interface also lets a sender specify an exchange rate fee in its advanced options [4].

As of September 30, 2026, no public source gives a fee schedule for ODL or says who earns the difference between the two interim XRP rates and the end-to-end rate.

Who absorbs XRP price movement between the guaranteed quote and settlement?

The documentation fixes the sender’s end-to-end rate once the quote is accepted [4]. After that, the receiver liquidates the XRP for fiat and Ripple invoices the sender in aggregate [2].

Because the sender’s rate is guaranteed, any XRP price movement between acceptance and liquidation falls on some other party. As of September 30, 2026, Ripple’s documentation does not say whether that is Ripple, the receiver or an exchange.

How do ODL, RippleNet, xRapid and Ripple Payments relate as product names over time?

In the current documentation, “Ripple Payments” is the name of a user interface designed to help manage all aspects of a business on RippleNet, from peering with network partners to monitoring payments [1]. On March 3, 2026 Ripple used the Ripple Payments name more widely, calling it its solution for moving money across traditional and digital rails [5]. The same release says Ripple Payments lets customers collect, hold, exchange and pay out in fiat and stablecoins, and Ripple reported more than $100 billion in processed volume and a presence in more than 60 markets [5]. 24/7 Wall St. described RippleNet on April 1, 2026 as a messaging and settlement network that banks can run entirely in fiat [6].

As of September 30, 2026, no public source documents the name xRapid or the dates when these names changed.

Does Ripple still use XRP in ODL, and how much of its business does?

Ripple’s documentation, read in September 2026, still describes XRP as ODL’s bridge currency [1]. The strongest evidence against reading that as broad XRP use comes from several sources. 24/7 Wall St. reported on April 1, 2026 that only around 40% of RippleNet partners use ODL, and named Santander as a bank that uses RippleNet’s messaging without touching XRP [6]. Ripple itself said on March 3, 2026 that Corpay funds and settles positions across Asia-Pacific with RLUSD through Ripple’s custody and liquidity services, “eliminating the need for costly pre-funding” [5]. crypto.news concluded on July 8, 2026 that inside Ripple’s product stack the asset doing the settlement work is predominantly RLUSD, not XRP [7]. CryptoSlate wrote on December 20, 2025 that XRP only appears where pre-funding costs and FX spreads justify taking token volatility risk [8].

The Corpay example shows Ripple offering the no-prefunding benefit through a stablecoin, so that benefit does not by itself require XRP. The volume question is taken up on How much of Ripple’s payment volume actually uses XRP?, and the path from trial to production on How does a bank go from an ODL pilot to full volume?.