Ripple Asks Wall Street to Bring Its Lending Habits On-Chain, But Leaves the Underwriting at Home 🏦

Ripple said Monday that developers can begin experimenting with a new native lending protocol on the XRP Ledger through a testing environment, moving the network closer to letting institutions borrow and lend digital assets directly on-chain. The announcement, outlined in a blog post, describes two technical specifications, XLS-65 and XLS-66, which together would add credit infrastructure to XRPL and, if approved by network validators, allow tokenized real-world assets such as money market funds and commodities to be deployed as working capital rather than held as static inventory across millions of accounts. XRP is the native token of the ledger.

The proposed system rests on two components: a "Single Asset Vault" that standardizes how assets are pooled on XRPL, and a "Lending Protocol" that governs loan terms, servicing and repayment logic. Ripple emphasized that underwriting decisions, including how lenders evaluate a borrower's creditworthiness, are designed to remain off-chain so that institutions can keep control of their lending criteria. "This separation mirrors real financial infrastructure," Ripple wrote. "By preserving that distinction, XRPL can support a wider range of credit structures over time, rather than hard-coding one lending model into a single application."

Once a loan is originated, repayment schedules, interest calculations and default conditions run on predefined on-chain rules, with default losses absorbed through a multi-tiered structure that puts capital from pool managers and underwriters at risk first, an approach Ripple said mirrors traditional finance. The firm drew a contrast with existing protocols such as Aave, noting that their crypto-native governance models and risk frameworks do not necessarily align with Wall Street's procedures. Ripple cited use cases including a payment provider accessing short-duration liquidity and treasury teams generating yield on digital assets under defined terms.

The lending protocol follows a May milestone for the network tied to tokenization platform Ondo, and arrives as institutional interest in on-chain credit grows. Separately, Standard Chartered's global head of digital assets research Geoff Kendrick this week initiated coverage of Aave's AAVE token with a long-term price target implying gains of roughly fiftyfold by the end of the decade, a forecast issued months after the protocol was shaken by a major exploit. Ripple said the XRPL Lending Protocol will be available for developer testing in the build environment while validator voting on XLS-65 and XLS-66 proceeds.