Ripple proposes XRPL lending protocol to power onchain credit markets
A new protocol lets institutions borrow against tokenized real-world assets directly on the XRP Ledger, with validator approval already secured
Ripple, a major blockchain team and one of the key contributors to the XRP Ledger (XRPL) ecosystem, has unveiled the XRPL Lending Protocol, a proposed onchain lending infrastructure that aims to make tokenized assets more productive.
The framework would enable institutions to make loans backed by onchain assets while keeping credit underwriting offchain, the team said Monday.
According to Ripple, blockchain infrastructure has focused largely on asset issuance, ownership and settlement, but has yet to replicate the lending and financing mechanisms that underpin traditional capital markets.
As more real-world assets move onchain, the company said institutions increasingly need ways to borrow against those assets, access liquidity and finance operations without selling their holdings.
To address that gap, Ripple’s proposed protocol keeps underwriting and credit decisions offchain, allowing financial institutions to continue handling borrower assessments, compliance and legal agreements through existing processes.
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Once loan terms are finalized, XRPL automates the operational aspects of lending, including loan origination, interest accrual, repayment schedules and default enforcement, providing standardized execution across participants.
The framework, pending validator approval, includes the Single Asset Vault (XLS-65), which pools liquidity in individual assets, and the Lending Protocol (XLS-66), which deploys that liquidity into loans with defined terms, as noted in the proposal.
Ripple said the protocol could support applications such as short-term liquidity facilities, inventory financing and collateralized lending against tokenized assets.