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XRPL lending protocol plans institutional credit layer

Written by Mahathir BayenaPublished Dec. 21 2025Last Updated Dec. 21 2025

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XRP (CRYPTO:XRP) is approaching a major structural shift as Ripple advances the XRPL Lending Protocol, positioning the asset at the centre of a new protocol-level credit framework designed for institutional liquidity and large-scale onchain finance.

Ripple confirmed on 19 December that a new version of the XRPL Lending Protocol is in development, describing it as a first-of-its-kind system that embeds fixed-term, fixed-rate lending directly into the XRP Ledger.

The initiative is intended to move beyond experimental decentralised finance models by offering predictable, underwritten credit products that meet the operational requirements of enterprises and financial institutions.

Senior Staff Software Engineer at Ripple Ed Hennis announced the development publicly, stating, “The XRPL Lending Protocol is coming. A new protocol-native system for fixed-term, fixed-rate, underwritten credit,” Ed Hennis said.

He explained that the protocol introduces institutional-style lending at the base layer of the ledger rather than relying on smart contracts deployed at the application level.

According to Hennis, this approach allows enterprises to access onchain credit with clearly defined terms, transparent risk parameters, and deterministic execution governed directly by the network.

The lending mechanics are enabled through the XLS-66d amendment, which embeds loan enforcement, interest calculations, authorisation rules, and repayment logic directly into the ledger itself.

Each loan is isolated within a Single Asset Vault, a structure that holds only one asset such as XRP or RLUSD and prevents risk from spreading across unrelated credit facilities.

This segregation model is designed to appeal to institutional participants by limiting exposure and improving balance-sheet clarity for borrowers and lenders alike.

Pool administrators are responsible for underwriting standards, servicing obligations, and first-loss capital, while the ledger guarantees execution and transparency at the protocol level.

Hennis described the system as institutional-grade infrastructure that combines traditional credit discipline with the efficiency of onchain settlement.

Market makers borrowing XRP or RLUSD for inventory and arbitrage can deploy liquidity across venues without locking up their balance sheets.

Ed Hennis highlighted.

The protocol also opens new opportunities for custodians, exchanges, and long-term XRP holders to generate yield by lending into isolated and underwritten credit pools.

Custodians, exchanges, and large XRP holders can lend XRP into isolated, underwritten credit facilities to create the first scalable yield venue for XRP’s $115B+ market cap.

Ed Hennis said.

He added that XRP’s market capitalisation has historically remained idle due to the absence of institutional lending infrastructure suited to the asset.

Notably, XRP’s $124B market cap can finally be lent into institutional credit facilities to generate real yield instead of sitting idle.

In a separate post, Ed remarked.

The relevant protocol amendments are expected to enter validator voting in late January, marking a critical governance milestone for the network.

If approved, the changes would activate protocol-native credit markets on the XRP Ledger for the first time.

Hennis concluded by framing the development as a global breakthrough, stating that it positions XRPL as both a settlement layer and a credit infrastructure for real-world institutions.

At the time of reporting, XRP price was $1.92.