Developers Test XRPL Lending Protocol, Pending Validator Vote
Developers began testing the XRPL Lending Protocol in a test environment, implementing XLS-65 and XLS-66 to enable on‑chain lending and credit pending validator approval.
Ripple opened a testing environment Monday for developers to experiment with the XRPL Lending Protocol, which implements two technical specifications labeled XLS-65 and XLS-66. If XRPL validators approve the upgrades, the network would gain native on‑chain lending and credit features for tokenized assets.
The proposed package includes a standardized Single Asset Vault to pool assets and a Lending Protocol to define loan terms, servicing and repayment logic. Under the design, loan originations and repayment rules would be recorded on the ledger while decisions about creditworthiness remain off‑chain.
The company wrote that keeping underwriting off‑chain allows banks and financial firms to keep existing risk and compliance workflows intact. “This separation mirrors real financial infrastructure,” the announcement noted, adding that predefined rules would handle repayment schedules, interest calculations and default conditions once loans are live on the ledger.
The draft protocol uses a multi‑tiered risk structure to contain losses. Capital provided by pool managers and underwriters would absorb losses first, creating layered protection for other participants. The design differences reflect an effort to align on‑chain lending mechanics with institutional risk practices rather than using crypto‑native governance alone.
Practical uses cited include short‑duration liquidity for payment providers and a way for corporate treasuries to earn yield by lending tokenized holdings under clearer contractual terms. Ripple referenced a May transaction in which Ondo Finance used the XRPL for a cross‑border, cross‑bank redemption of tokenized U.S. Treasuries as an example of asset activity on the ledger that lending could complement.
The protocol could affect stablecoin usage on XRPL. The RLUSD stablecoin has reached a market capitalization near $1.5 billion since its late‑2024 launch. Market trading for XRP was near $1.05 on Monday, about 8.2% lower over the prior week and at its lowest level since November 2024.
The specifications remain subject to community governance and a formal validator vote. Developers can use the test environment to refine implementation details before any network upgrade is scheduled.
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