Ripple has proposed the XRPL Lending Protocol, which would allow institutions to borrow against tokenized assets on the XRP Ledger while keeping credit decisions off-chain. The protocol consists of two proposed standards, XLS-65 and XLS-66, which define Single Asset Vaults and a lending layer that automates loan mechanics at the network's base layer. The features are currently only available on a test network and require validator approval to go live. Unlike existing DeFi lending protocols like Aave and Compound, which rely on crypto-native governance and community votes, Ripple's proposal fixes lending rules at the blockchain level to provide predictable risk for institutional lenders. The use case includes short-term financing, such as a payment company borrowing against incoming settlements instead of using bank credit lines. The protocol is separate from XRP and RLUSD and is designed for institutional infrastructure rather than retail use. The proposals are subject to validator approval in the coming weeks.

Key facts

• Ripple proposes XRPL Lending Protocol (XLS-65, XLS-66) for institutional borrowing against tokenized assets.
• Smart contracts handle loan mechanics; credit underwriting remains off-chain with human teams.
• Protocol pools single assets in Single Asset Vaults and automates loans on XRP Ledger base layer.
• Features live on testnet only; require validator approval to go live on mainnet.
• Competes with Aave and Compound by offering fixed, network-level rules instead of governance votes.

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