Proposed XRPL standard would enable institutional loans against tokenized assets

Ripple has unveiled a proposed lending protocol for the XRP Ledger that would allow financial institutions to borrow digital assets without selling their holdings, broadening the network’s institutional finance ambitions beyond its traditional cross-border payments focus. The proposal is tied to XRPL Lending Protocol standards XLS-65 and XLS-66 and is already live for developer testing on testnet, moving the effort beyond a purely conceptual stage. Under the framework, institutions would be able to borrow against on-chain tokenized assets, while credit assessment and lending decisions would remain off-chain with human credit teams. XRPL would handle loan terms and enforcement onchain rather than replace conventional underwriting. Ripple says the protocol could also improve liquidity management and support yield generation on tokenized assets. The proposal has not been activated on mainnet and would still require validator approval before any launch, leaving deployment dependent on both technical progress and network governance.