Ripple announced Monday that developers can begin testing the proposed XRPL Lending Protocol, governed by two technical specifications (XLS-65 and XLS-66). If approved by network validators, the dual upgrade will introduce native credit infrastructure to the XRP Ledger, allowing financial institutions to borrow and lend digital assets on-chain. Tokenized real-world assets like money market funds and commodities could be used as working capital rather than sitting idle. The protocol consists of two components: the Single Asset Vault for pooling assets and the Lending Protocol for managing loan terms, servicing, and repayment. Underwriting remains off-chain to give lenders control over credit decisions, while repayment schedules and default conditions operate on-chain with loss compartmentalization. Ripple contrasts the design with public protocols like Aave, arguing that crypto-native governance models don't align with Wall Street risk management. This development follows Ondo Finance's use of XRPL for cross-border tokenized Treasury redemptions in May 2024. Ripple's stablecoin RLUSD, launched in late 2024, now has a $1.5 billion market cap. XRP traded at $1.05, down 8.2% over the past week.

Key facts

• Ripple launched a test environment for the XRPL Lending Protocol on Monday.
• The protocol relies on two specifications (XLS-65 and XLS-66) requiring validator approval.
• Underwriting stays off-chain, while loan terms and defaults are processed on-chain.
• Ripple contrasts it with Aave, citing alignment with institutional risk management.
• XRP price fell to $1.05, down 8.2% over the past week.
• RLUSD stablecoin reached a $1.5 billion market cap since launch in late 2024.

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