XRP's Institutional Credit Use Case Spurs Supply Shock Fears
A recent proposal by ClearPool Financial has renewed attention on XRP's role in institutional finance. The centerpiece of the discussion is the plan to migrate to the XRP Ledger and build institutional credit products.
Tom Lombardi, from the XRP Ledger Foundation, highlighted a concrete credit scenario where exchanges and payment service providers face a liquidity gap when customers want stablecoins immediately, but fiat wires take one to five days to settle. To bridge this gap, companies must deploy their own capital or rely on costly venture funding.
The proposed model uses the XLS-65 and XLS-66 lending protocols on the XRP Ledger, allowing firms to borrow against incoming fiat wires, with credit risk transferred to institutions. Lombardi noted his fund operates at roughly 'three or four bits a day,' which is a fraction of what venture capital would charge.
Digital Asset Investor called this 'the killer use case' for XRP and stated it 'is going to be the thing that causes supply shocks in XRP' and will 'ultimately force that price in an upward direction.'