XRP Ledger Validators Weigh Lending Infrastructure Upgrade
The XRP Ledger is considering a major upgrade that could bring on-chain credit to institutions. The SingleAssetVault and LendingProtocol amendments, proposed as XLS-65 and XLS-66 specifications, are being weighed by validators. Currently, support for the amendments stands at around 37% and 34%, respectively, with both still below the required 80% threshold.
The proposed infrastructure would enable pooled funds to finance fixed-term, uncollateralized loans while recording loan agreements, payments, and defaults directly on XRPL. However, credit assessment and underwriting would remain off-chain. Ripple has described lending as a missing layer for tokenized capital markets, arguing that bringing assets on-chain has limited utility if institutions cannot subsequently put those assets to work through credit and liquidity markets.
The proposals create potential new uses for the XRP asset but do not automatically turn it into a yield-bearing token. A vault may be configured to hold XRP, and depositors could potentially earn returns when liquidity is deployed through a lending market. However, this opportunity would depend on the specific vault, loan broker, borrower terms, and risk structure created after the amendments activate.