XRP’s tightening liquid supply is creating stronger long-term value conditions for real-world payments.
Ripple’s fast, low-cost infrastructure makes XRP suitable for global crypto payroll.
SMEs can benefit most with hybrid payroll models that balance stability and XRP’s growth potential.
XRP was created with a fixed total supply of exactly 100 billion tokens. This amount was minted at launch, and no new XRP will ever be created. Out of this total, about 60.3 billion XRP are recognised as circulating in late 2025. The remaining tokens are locked in escrow or held in long-term reserves, often managed by Ripple or early stakeholders.
This structure is different from cryptocurrencies that mint new coins gradually. XRP’s supply does not grow. Instead, liquidity enters the market through a predictable system in which Ripple releases one billion XRP from escrow every month. The system brings in transparency, but makes the available supply much more limited than what the overall total suggests.
Even though most of the total XRP supply is considered "circulating," it is not particularly liquid. A portion is held by institutions, a portion by investors that aren't frequent traders, and a large portion is still in escrow. This makes the environment one in which the tokens actually available to companies and people to deal with are far fewer than the headline figures suggest.
Also Read: Is XRP a Good Buy Below $3 in 2025?
Despite XRP having one of the biggest circulating supplies in the crypto market, the actual amount that is liquid is dwindling. Recent data from exchanges points to sharp declines in balances maintained on major platforms. In one instance, Binance reserves had fallen to around 2.7 billion XRP, considered one of the lowest on record. Such a fall indicates that users are withdrawing XRP from exchanges and privately holding it, thereby reducing the liquidity pool available for market use.
While this happens, institutional investors and funds are also gathering XRP and immediately placing it in custody for long-term holding. This further reduces the number of tokens that could otherwise freely move on exchanges. In addition, although one billion XRP are unleashed from escrow on a monthly basis, quite a significant amount usually finds its way back to escrow or is absorbed by long-term owners. Thus, the regular monthly sell-off does not contribute much, if anything, to increased liquidity.
The combination creates what many describe as an XRP "supply squeeze". This is the environment that influences price behavior, liquidity conditions, and the level of predictability available to companies considering the use of XRP in their financial systems.
There is a growing interest by small and medium-sized enterprises in crypto-based payroll systems. Many SMEs operate with remote teams or conduct cross-border business for which traditional international settlements are often slow and expensive. XRP, with its fast settlement times of a few seconds and very low transaction costs, presents a practical alternative. These characteristics enable SMEs to transfer wages more quickly, reduce operational overhead, and avoid the delays typically associated with global banking networks.
Some employees also find crypto payroll appealing, as a portion of the workforce is open to receiving part of their salary in digital assets in hopes of long-term value appreciation.
With institutional interest in XRP going up and liquid supply tightening, the asset could strengthen in value over time, some believe. This expectation can make XRP an attractive option for compensation packages where employees want exposure to potential upside.
Decreasing liquidity also poses risks for XRP's price. This means that SMEs in need of buying large amounts of the digital asset on a fixed date may face worse prices or slippage, considering the low exchange liquidity. If too many businesses simultaneously deploy an XRP-based payroll, surges in demand at given periods could drive prices higher on short notice.
Another important factor is volatility: if the XRP price changes sharply between the time the salary is calculated and when the tokens are purchased, employers could end up paying more, or employees might receive less value than expected. These kinds of uncertainties demand a well-planned treasury strategy for businesses.
Some companies might want to accrue XRP over time during the month rather than purchase everything on one day. Others will most likely decide to cooperate with payment service providers that already maintain access to liquidity pools. Such arrangements can reduce the risk of sudden cost increases and make payroll operations more predictable.
One of the core reasons behind the tightening liquidity in XRP is institutional interest. Significantly, large amounts of XRP are being taken off exchanges and put into longer-term custody. Exchange reserves continue to trend down, showing that market participants prefer holding the asset for extended periods rather than actively trading it.
Monthly escrow releases do occur, but the newly released XRP does not always re-enter active circulation. Much of it either returns to escrow or is purchased by organisations with long-term plans. This sets up a market in which accessible supply is gradually decreasing while interest and utility continue to increase. Future liquidity conditions for SMEs may become even tighter unless managed carefully.
With the dynamics at play in supply, SMEs looking to implement XRP payroll may have to consider a hybrid approach. Indeed, most companies already use stablecoins in addition to XRP, where the stablecoin covers the more predictable portions of the salary, while XRP is used optionally or as an additional component. This structure provides employees with flexibility, reduces price-related risks, and avoids sudden spikes in payroll costs.
Another helpful strategy is keeping an XRP treasury buffer. Buying the token incrementally, over time, not all at once, will lessen the risk of short-term volatility. This also helps prevent companies from competing for liquidity on the same day each month.
Smoother payroll operations can also be supported by offering instant conversion options to employees. Allowing employees to convert their digital assets to fiat or stablecoins immediately reduces the impact of XRP price predictions. This will ensure a positive experience for employees despite market conditions.
Also Read: Could Long-Term Accumulation Offset Downside Risks in XRP’s Price Structure?
XRP supply constriction creates both challenges and opportunities. A supply structure that can limit immediate liquidity may be very supportive of long-term stability and growth. When combined with fast settlement speeds, low costs, and expanding global payment infrastructure, XRP remains a strong candidate for modern payroll solutions.
For SMEs, the key is not relying solely on XRP price prediction and supply but designing payroll systems that use it wisely alongside stable assets. With proper planning, treasury management, and hybrid models, the current deficiency becomes less of an obstacle and more of a catalyst. It would, in fact, encourage the development of smarter, more efficient digital payroll systems that could reshape how salaries are handled in a global, digital-first economy.
1. What makes XRP suitable for crypto payroll?
XRP offers fast settlement, low transaction fees, and strong global payment infrastructure, making salary transfers quick and cost-efficient for SMEs.
2. Is XRP’s supply crisis bad for businesses?
Not necessarily. While liquidity is tightening, predictable escrow releases and growing institutional interest can support long-term value, benefiting payroll designs.
3. How can SMEs manage volatility when paying salaries in XRP?
SMEs often use hybrid models, combining stablecoins for base salary with optional XRP payouts and gradual accumulation to reduce price risk.
4. Does Ripple provide tools that help businesses adopt crypto payroll?
Yes. Ripple’s regulated payment networks and cross-border settlement solutions simplify onboarding and offer compliant rails for businesses.
5. Can employees choose to convert XRP salaries into fiat immediately?
Yes. Most crypto payroll systems allow instant conversion, giving employees flexibility and protection from short-term price changes.
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