Arizona Explores Official XRP Holdings as Network Activity Declines

Arizona moves to hold XRP in a state reserve as Ripple partners with Aviva Investors, despite on-chain data showing a sharp 90% drop in XRP network activity.

A legislative proposal in Arizona has advanced, potentially authorizing the state to hold XRP within a dedicated digital asset reserve. This development emerges alongside a significant partnership for Ripple in Europe, yet contrasts sharply with recent on-chain data showing a steep drop in the token's network usage.

Legislative Advance for Digital Asset Reserve

The Arizona Senate has voted 4-2 in committee to advance Senate Bill 1649. This legislation proposes the creation of a "Digital Assets Strategic Reserve Fund." The bill explicitly names XRP and Bitcoin as suitable assets for the state treasury to hold. Notably, the fund would not be capitalized by taxpayer dollars but rather through seized or forfeited cryptocurrencies. The State Treasurer would manage the reserve. If enacted, Arizona would position itself among the first U.S. states to establish an official treasury position in XRP.

Institutional Partnership with Aviva Investors

In a separate but concurrent development, Ripple has secured a partnership with Aviva Investors. The global asset manager plans to tokenize traditional investment funds on the XRP Ledger. This initiative marks Aviva's first venture into tokenization and represents Ripple's inaugural collaboration with a European investment management firm. The project is designed to evolve through 2026 and beyond.

This partnership adds to the expanding XRP ecosystem, which now includes the RLUSD stablecoin. RLUSD has achieved a market capitalization of approximately $1.56 billion. Furthermore, over 90 active projects are currently building on the XRPL EVM Sidechain.

Contrasting On-Chain Metrics Show Sharp Decline

Despite these institutional strides, network data reveals a substantial contraction in activity. After peaking in early February, the payment volume on the XRP network has plummeted by nearly 90%. By February 23, the volume stood at roughly 80 million XRP, a stark drop from over 2.5 billion at its peak.

A similar downturn is visible in active addresses. Between February 10 and 24, the count fell 55%, from 32,684 to 14,551. Some market analysts suggest this public metric may be skewed by increasing institutional use of private, permissioned systems on the ledger, which do not reflect in public data.

Additional on-chain signals have raised concerns. Large volumes of XRP have recently been moved to exchanges, an action often associated with selling pressure. This activity coincided with realized losses reaching their highest weekly level since November 2022.

Diverging Signals for XRP's Trajectory

The landscape for XRP presents a dichotomy. On one side, growing institutional and governmental interest is evidenced by Arizona's legislative move and the Aviva Investors alliance. On the other, the dramatic decline in public network usage and concerning on-chain transfers pose significant questions.

Whether the positive institutional developments can counterbalance the weak on-chain momentum will likely become clearer in the coming weeks. Key factors will include further details emerging from the Aviva partnership and the potential final passage of Arizona's Senate Bill 1649.