Ripple unveils XRPL lending protocol to expand onchain finance
The new protocol delegates credit decisions to licensed institutions while enforcing loan terms directly on-chain, with validator approval still pending.
Ripple has outlined a proposed lending framework for XRP Ledger that would allow institutions to originate fixed term credit using liquidity pooled directly on the network.
The system separates credit assessment from loan execution. Banks, lenders and pool administrators would continue to evaluate borrowers, negotiate legal terms and conduct compliance checks offchain. Once a loan is approved, XRP Ledger would record the agreement and enforce interest calculations, repayment schedules and default conditions.
The framework consists of two proposed standards. XLS 65 introduces Single Asset Vaults that pool one type of asset from multiple depositors. XLS 66 allows that liquidity to be issued through configurable loans with predefined servicing and repayment terms.
The lending protocol would support fixed term and uncollateralized loans, relying on external underwriting and risk management rather than automatic liquidation models commonly used across decentralized finance. The amendments are currently open for validator voting and are not yet active on XRP Ledger.
Ripple said the structure could be used by payment companies seeking short term liquidity between settlement windows, market makers financing inventory and treasury teams deploying idle digital assets into underwritten credit facilities.
Access could be restricted through onchain credentials and permissioned domains, allowing approved lenders and borrowers to participate while the broader network remains public. Single Asset Vaults can also be configured as public or private and issue tokenized shares representing each depositor’s ownership.
The protocol also supports first loss capital at the individual facility level. Under that structure, administrators or underwriters contribute junior capital that absorbs losses before senior liquidity providers, rather than spreading losses across unrelated lending pools.
Ripple positioned the proposal as infrastructure for making tokenized assets productive after they are issued. The company argued that financing and liquidity tools remain a missing layer as stablecoins, Treasury products, private credit and other real world assets move onto public blockchains.