XRP Holders Can Now Borrow RLUSD on Ethereum Without Selling Their Tokens
XRP holders can now borrow Ripple's RLUSD stablecoin on Ethereum without selling their crypto. This integration is made possible by Flare's FXRP, which has been approved as collateral in Sentora's RLUSD vault on Morpho.
According to Flare, the XRP-based asset was the first time an XRP-based asset had been approved as collateral in an institutionally curated Ethereum lending vault. This move is seen as a major step forward for XRP, which has historically been underused in decentralized finance (DeFi) despite its large and liquid market.
The integration allows users to convert their XRP into Flare's FXRP token, bridge it to Ethereum, deposit it as collateral on Morpho, and borrow RLUSD. This means that XRP holders can access dollar-pegged liquidity without having to sell their tokens, allowing them to retain exposure to XRP's price.
Ripple has been working to establish RLUSD as an enterprise-focused stablecoin, with testing beginning in August 2024 on Ethereum and the XRP Ledger for cross-border payments. In December 2024, Ripple received approval from the New York Department of Financial Services ahead of the stablecoin's launch, and last month Mastercard announced that it would support settlement of regulated stablecoins including RLUSD.