Ripple has proposed two new standards for a native XRP Ledger lending protocol that would let banks and institutions borrow against tokenized assets without ever selling them.
Key Points:
- Ripple wants institutions to borrow against tokenized assets directly on the XRP Ledger.
- Credit and compliance stay off-chain while the ledger handles loan servicing and repayment.
- The XLS-65 and XLS-66 standards still need validator approval before they can go live.
Ripple Maps Onchain Credit
Ripple detailed the proposal in a Jun. 29 blog post, arguing that tokenization has already moved real-world assets like treasuries, money market funds, stablecoins, commodities, and private credit onchain while the financing of those holdings lagged well behind.
The company says putting an asset on a ledger is only half the job, because real markets run on borrowing, collateral, and steady liquidity, not simple transfers between accounts. The rest, it argues, was missing.
Ripple calls that gap the missing layer of onchain finance.
The design keeps credit judgment and compliance with the institutions off-chain, while the ledger itself enforces origination, repayment schedules, interest accrual, and default handling through fixed, standardized rules written into the protocol. Access stays permissioned through verified credentials. The base network remains public, yet access to each credit facility is gated to approved, vetted, and credentialed participants only.
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XRPL Lending Targets Institutions
Two components frame the system, a Single Asset Vault that pools a single asset into shared liquidity and a lending layer that converts that pooled capital into loans with defined terms, servicing, and repayment logic. Ripple likened the split to traditional capital markets, where the custody of assets sits apart from the separate machinery that originates, services, and finances loans.
A payments firm holding RLUSD (RLUSD) reserves could borrow against an incoming cross-border settlement for a day or two, rather than sell assets or tap a costlier bank credit line. Such a line might run 300 to 400 basis points. Comparable onchain lending markets already hold billions of dollars in deposits, and Ripple wants the XRP Ledger to compete for that institutional flow.
Risk is isolated at each facility through first-loss capital, so junior money absorbs early losses before senior lenders take any hit on their position. One default would not spread to the others.
The amendment entered validator voting earlier this year after the XRPL v3.1.0 release, and activation still requires more than 80% of validators backing it for two straight weeks before the feature can go live.
The push builds on a May milestone, when Ondo Finance redeemed tokenized U.S. Treasuries across banks directly on the XRP Ledger network. XRP (XRP) traded near $1.05 this week, down roughly 8% over the past seven days.
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