Ripple, the company behind the XRP Ledger, is stirring the pot with a new proposal that seeks to introduce privacy-coin-like features to its blockchain. This move, unveiled in an XRP Ledger Standards (XRPLF) discussion on September 13, 2025, aims to enhance transaction privacy while maintaining the network’s commitment to transparency and compliance. The proposal, spearheaded by Ripple engineers Murat Cenk and Aanchal Malhotra, could mark a significant evolution in the capabilities of the XRP Ledger.
The Proposal: Confidential Multi-Purpose Tokens
At the heart of Ripple’s latest initiative are Confidential Multi-Purpose Tokens (MPTs). These tokens are designed to offer enhanced privacy for transactions conducted on the XRP Ledger. Unlike traditional privacy coins, which often obscure transaction details entirely, MPTs strike a balance, allowing certain aspects of transactions to remain confidential while keeping others visible to ensure compliance and maintain trust in the system.
The engineers behind the proposal argue that this dual approach can satisfy both individual users’ needs for privacy and regulators’ demands for transparency. Cenk and Malhotra emphasize that MPTs won’t compromise the integrity of the public supply, a cornerstone of the XRP Ledger’s philosophy. Instead, they envision a system where transaction details, like amounts and parties, can be shielded selectively, adding a layer of confidentiality without sacrificing the network’s transparency.
Balancing Privacy and Compliance
One of the central challenges in implementing privacy features in a blockchain like XRP is navigating the tension between user privacy and regulatory compliance. Privacy coins such as Monero or Zcash have faced scrutiny from regulators due to their ability to obscure transactions completely. This opacity can hinder efforts to prevent illicit activities such as money laundering or fraud.
Ripple’s proposed solution with MPTs cleverly sidesteps this issue by embedding compliance tools directly into the token structure. This ensures that while certain transaction details may be hidden from the public eye, they remain accessible to parties involved in regulatory oversight. This approach could potentially placate regulators who have been wary of privacy coins, as it offers a compromise—granting privacy without sacrificing accountability.
Potential Impacts on the XRP Ecosystem
The introduction of MPTs could have several ripple effects (pun intended) on the XRP ecosystem. For one, it may attract users who value privacy but have been discouraged by the public nature of current blockchain transactions. This could broaden XRP’s appeal, drawing in individuals and businesses seeking more confidentiality in their financial dealings.
Moreover, the proposal could position XRP as a more versatile cryptocurrency, capable of catering to a wider range of use cases. From safeguarding sensitive business transactions to protecting individual users’ financial privacy, MPTs could open up new avenues for XRP adoption.
However, there are also potential downsides and criticisms to consider. Some members of the cryptocurrency community might argue that introducing privacy features could complicate the network’s architecture or slow down transaction processing speeds. Others could be concerned that any move towards privacy, however controlled, might still attract regulatory pushback.
Community and Regulatory Reactions
Ripple’s proposal has sparked lively discussions within the crypto community. Proponents argue that the introduction of MPTs is a forward-thinking move that enhances user privacy without abandoning transparency or compliance, embodying a more mature and adaptable blockchain ecosystem.
Critics, however, are more cautious. They point out that while MPTs might offer a middle ground, the devil is in the details. Successful implementation will require robust systems to ensure that privacy features don’t inadvertently enable illegal activities, a concern that has long plagued privacy coins. Furthermore, there’s the looming question of regulatory acceptance. Even with built-in compliance tools, the very concept of enhanced privacy could be enough to raise eyebrows among policymakers worldwide.
Looking Forward
As the conversation around MPTs continues, it’s clear that Ripple is attempting to walk a fine line. The company is trying to innovate within the confines of existing regulatory frameworks while also pushing the boundaries of what’s possible with blockchain technology. For XRP holders and the broader cryptocurrency community, the coming months will be crucial in determining whether this proposal gains traction and how it might reshape the landscape of digital finance.
Ripple’s endeavor to introduce privacy-oriented features to the XRP Ledger reflects a broader trend in the cryptocurrency space: the constant balancing act between innovation and regulation. As blockchain technology matures, the need to reconcile privacy with compliance becomes ever more pressing. Whether Ripple’s Confidential Multi-Purpose Tokens will successfully navigate this complex terrain remains to be seen, but the effort itself underscores the dynamic and evolving nature of the crypto world.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
