
Ripple has introduced proposals for a new lending protocol on the XRP Ledger, aiming to enable institutional borrowing against onchain assets. The proposed system, outlined in technical drafts XLS-65 and XLS-66, separates the blockchain's mechanical enforcement of loans from the off-chain credit decision-making process. By keeping credit assessments with traditional institutions, Ripple seeks to bridge the gap between blockchain efficiency and regulatory compliance. The protocol utilizes Single Asset Vaults to pool liquidity, allowing entities to secure short-term financing against assets like the RLUSD stablecoin. This infrastructure is designed to automate repayment and default processing while maintaining consistent, immutable rules at the network's base layer. Unlike crypto-native lending protocols that rely on community governance, Ripple's approach targets institutional stability by preventing underlying risk rules from shifting. This development represents a strategic move to position the XRP Ledger as a viable platform for institutional-grade financial services.
The XRP Ledger (XRPL) is a decentralized, public blockchain designed for fast, low-cost cross-border payments and asset tokenization. It utilizes a unique consensus mechanism involving trusted validators rather than proof-of-work or proof-of-stake to confirm transactions. The network supports the issuance of various assets, including stablecoins and tokenized real-world assets, through its native decentralized exchange capabilities.