Ripple pushes XRPL lending to expand XRP's role

Ripple is backing a lending upgrade for the XRP Ledger that could widen XRPL's use beyond payments, a shift crypto investors have been waiting to see. If adopted, the proposal would let institutions borrow against assets held on XRPL, including stablecoins and tokenized instruments, while keeping credit decisions, compliance checks, and legal agreements off-chain.

The design uses two proposed standards. XLS-65 would create single-asset vaults, and XLS-66 would add fixed-term lending. After a loan is agreed, the ledger would handle interest accrual, repayment schedules, and default procedures. Access to some pools could also be restricted through credentials, giving institutions more control than open DeFi markets.

That puts XRPL in a middle ground between public lending protocols like Aave and private institutional credit networks. Ripple said the features are available for testing on a development network, but both standards still need validator approval before mainnet launch.

The proposal also supports Ripple's stablecoin plan. RLUSD, with a market cap of about $1.56 billion, could be used in short-term liquidity facilities for payments and treasury operations. A recent Halborn re-audit found no critical or high-severity flaws after code changes, though it still highlighted borrower, liquidity, and administrator risk.