XRP Ledger Lending Protocol enters validator voting phase
In brief
- XLS-66 Lending Protocol and XLS-65 single asset vaults now enter validator approval stage
- Institutional working capital use case targets payment providers awaiting cross-border settlement
- XRPL combines public blockchain liquidity with regulatory compliance and off-chain credit assessment
A new credit layer for institutions
Jasmine Cooper, head of product at RippleX, noted that the infrastructure around tokenization has remained largely absent or fragmented. The XRPL approach differs from decentralized finance platforms by relying on institutions to handle credit assessments off-chain, while the blockchain natively enforces the mechanics of repayment schedules, interest calculations, and default conditions based on agreed-upon terms.
Cooper expressed a desire to see more of the lifecycle move on-chain over time, though execution does not necessarily have to happen off-chain. This hybrid model aims to strike a balance between institutional control and blockchain transparency.
Two complementary components
The proposed credit infrastructure consists of two complementary components: single asset vaults (XLS-65) for pooling and managing a single asset on the ledger and the lending protocol (XLS-66). The protocol structures risk by supporting first-loss capital at the facility level, with pool administrators or underwriters putting junior capital at risk.
The system targets practical working capital use cases for institutions. A payment provider waiting for cross-border settlement to close, for example, could access short-term working capital facilities without relying on traditional banking channels.
Regulatory compliance meets public blockchain
XRPL aims to offer institutions the liquidity and distribution benefits of a public blockchain combined with strict regulatory compliance. The XLS-65 and XLS-66 proposals are currently subject to approval by XRPL validators. If approved, the native credit layer will become available on the mainnet, opening a new revenue stream for the ecosystem while positioning XRPL as infrastructure for institutional finance.
