Ripple Proposes Institutional Native Lending on XRPL; Analysts Urge Holders Not to Sell XRP
Ripple developers have proposed XLS-66d to add institutional-grade, native lending to the XRP Ledger (XRPL). The design introduces Single Asset Vaults — isolated, per-loan vaults for XRP and stablecoin RLUSD — managed by pool administrators who underwrite, service loans, and provide first-loss capital. Loans are fixed-term and fixed-rate, with underwriting and KYC performed off-chain to reduce smart-contract and regulatory risk. Target users include banks, payment firms, market makers and fintechs for corridor funding, inventory financing, market-making liquidity and pre-funding instant settlements. Ripple expects validator governance voting on activation in late January 2025. Community voices urged holders not to sell XRP and suggested using borrowing against holdings as an alternative. For traders, the proposal could create new yield pathways for XRP and RLUSD, potentially increasing demand and on-ledger liquidity while reducing pooled-lending systemic risk. Key risks include uptake uncertainty, regulatory scrutiny, and credit/default exposure managed by administrators. Primary keywords: XRPL, XRP, onchain lending, RLUSD, institutional lending.
Bullish
The proposal is likely bullish for XRP because it introduces native, institutional-focused lending primitives that could increase demand for XRP and RLUSD through new yield-bearing uses (underwritten loans, pool administration services, and on-ledger settlement). Key bullish drivers: (1) capital-efficient credit vs. overcollateralized DeFi could attract institutions and exchanges seeking yield and liquidity; (2) on-ledger settlement and predictable fixed-rate, fixed-term loans reduce operational friction for market makers and payment firms, likely increasing on-chain flows; (3) governance timeline (validator vote) gives a clear path to activation, which can be priced in by markets. Short-term impact: mixed–initial uncertainty, potential profit-taking, or volatility around governance milestones and regulatory commentary could cause price swings. Long-term impact: positive if adoption by banks, custodians, exchanges or large market makers materializes, expanding real-world demand for XRP and RLUSD and creating native yield markets. Offsets and risks: uptake may be slow, regulatory or compliance actions could limit institutional participation, and credit losses handled by administrators could dampen enthusiasm. Overall, upside outweighs risks if the protocol sees meaningful institutional adoption.