Key highlights:
- Ripple’s proposed lending protocol is now in its validator voting phase
- The system would allow institutions to access short-term loans using on-chain assets
- Ripple is also exploring new ways to improve transaction security on the XRPL
Ripple has made another move in expanding the use of blockchain in traditional finance. The company is looking to launch a new lending system for the XRP Ledger. This would allow institutions to borrow funds using assets held on-chain.
The proposal, tagged the XRPL Lending Protocol, has now entered the validator voting phase. This would introduce a native lending layer to the network and open new financing options for businesses, if approved.
How the new XRPL lending system would work
The proposed lending infrastructure is built around two components. These are Single Asset Vaults (XLS-65) and the Lending Protocol (XLS-66).
Single Asset Vaults would allow users or institutions to pool a single asset on the network. The lending layer would then use that liquidity to create fixed-term loans with agreed repayment schedules and interest rates.
The XRPL proposal separates credit assessment from loan execution, unlike many other DeFi platforms. To put it simply, lending institutions would decide who gets a loan and under what conditions. The blockchain would then manage interest calculations, repayment schedules, among others, once those terms are agreed upon.
Jasmine Cooper, Head of Product at RippleX, shared in an X post that the infrastructure needed to support on-chain assets has often been missing. She further shared that the goal of this is to create a more complete system that can support other financial activities.
In making her case, she said blockchain technology works well in enforcing rules, but it was not designed to evaluate creditworthiness or handle the regulatory requirements, which differ across countries.
Introducing a new financial primitive to XRPL: Credit (now in voting).
We’ve spent the last few years evolving the XRPL stack:
1. Represent value.
2. Move value.
3. Trade value.Now: finance value.
This is the step I’ve become most interested in.
Credit is fundamentally a…
— Jazzi Cooper (@jazzicoop) June 29, 2026
Ripple targets institutional finance
The proposal shows how the firm is more focused on institutional adoption instead of retail users. The lending system was not designed for a direct consumer product. It targets businesses, payment providers, and financial firms that need access to liquidity.
For instance, a company holding RLUSD reserves can borrow against expected incoming payments and then repay the loan once settlement is completed.
Meanwhile, the XRP issuer is entering a very competitive market. Lending platforms like Compound, Maple, and Aave already manage billions of dollars in deposits.
Ripple, however, believes they have an advantage over them. The firm argues that many of these protocols rely on governance systems that can easily change through community voting.
Financial institutions may find it difficult to assess the risks when rules can be changed at any time. Ripple projects that with this proposal, it can provide a more predictable framework.
David Schwartz makes a new security proposal
The lending vote happened to come up amid talks of a security upgrade on the ledger. Former Ripple CTO David Schwartz proposed a new reservation system designed to reduce front-running and sandwich attacks on the network. This comes not long after the XRPL security audit.
Under the proposal, users could reserve a future transaction slot several ledgers before execution. The reservation fee would be double the normal transaction cost to discourage abuse.
Concerns have been raised about the possibility of front running or transaction sandwich attacks on XRPL payments and offer crossing.
For the reasons I’ve explained, I’m not that concerned about this issue. But I have a proposal for a fairly simple scheme that would eliminate… https://t.co/lnhTv1bhBK
— David ‘JoelKatz’ Schwartz (@JoelKatz) June 29, 2026
According to Schwatz, the system would add a new ledger object called “ReservedTxns” to store transaction IDs. Each future ledger could contain up to 32 reserved transactions.
When that ledger is processed, the transactions will be executed first before any other transactions try to take advantage of them. Schwartz also suggested increasing reservation fees as soon as slots become occupied. This would make it quite costly for bad actors to reserve all available positions, that blocks other users from using the feature.
Source:: Ripple Moves Closer to Institutional Lending as XRPL Enters Key Validator Vote