Key Takeaways:
Key Takeaways:
Ripple proposed a lending layer for the XRP Ledger that would let institutions borrow against tokenized assets on-chain, splitting loan execution from credit underwriting in a design aimed at Wall Street rather than retail DeFi.
"The blockchain handles the mechanics of a loan — how money is pooled, how interest accrues, how repayment is enforced — while the actual credit decision stays with the lending institution," Ripple said in a statement shared with CoinDesk. The firm argued that fixed, network-level rules offer more predictable risk than crypto-native governance models where protocols can change risk parameters through community votes.
The protocol has two parts defined in technical drafts XLS-65 and XLS-66. A Single Asset Vault pools a single asset type, and the lending layer turns pooled funds into loans with set terms. Both remain proposals pending approval by the validators who run the network, though the features are available for testing on a development network. Under the system, repayment schedules, interest calculations and default conditions operate under predefined rules once a loan is originated, with losses from defaults compartmentalized through a multi-tiered structure where pool manager and underwriter capital is put at risk first.
Ripple is entering a crowded field. On-chain lending protocols Aave, Compound, Maple and Clearpool collectively hold billions in deposits. Ripple's counter is to fix lending mechanics at the network's base layer so the rules cannot shift underneath a lender, while keeping the network public rather than permissioned. The use case Ripple leads with is short-term financing: a payment company holding reserves in RLUSD, its dollar-pegged stablecoin, could borrow against an incoming settlement before a cross-border transfer clears, with repayment enforced automatically. The proposal follows a milestone in May when Ondo Finance used the XRPL to execute the first cross-border, cross-bank redemption of tokenized U.S. Treasuries. The XRPL Lending Protocol proposals are subject to validator approval in the coming weeks, requiring support from at least 80% of validators for two consecutive weeks to take effect.
This article is for informational purposes only and does not constitute investment advice.
