RippleX Head of Product Jazzi Cooper identified XRP as collateral for institutional credit as a "killer use case" for the token, marking a shift beyond its traditional role in cross-border payments.
Cooper's statement referenced the XLS-65 and XLS-66 lending protocols, now live on the XRP Ledger. These protocols enable market makers and institutional traders to post XRP as collateral to secure credit lines without liquidating their positions.
How the Lending Protocol Works
The protocol introduces native fixed-term, fixed-rate lending through Single Asset Vaults, allowing institutions to treat XRP as productive working capital while retaining full control over underwriting and compliance decisions off-chain.
Commentator Bill Morgan noted that this use case was not possible before the SEC lawsuit against Ripple concluded, becoming viable only after the lending protocol launched on XRPL. Ripple Prime already accepts XRP as eligible collateral alongside Bitcoin, RLUSD, fiat, gold, and treasuries.
A September 8 SEC filing from Charles Schwab indicated growing institutional adoption, showing XRP ETFs increasingly used as repo collateral with usage growing rapidly.
Institutional Infrastructure Development
XRPL validators confirmed that Lending Protocol v1.1 will ship with XRPL version 3.4.0, bringing fixes and improvements to Single Asset Vaults.
Institutional partners have positioned significant capital around the infrastructure. Clearpool has originated more than $930 million in institutional loans, while Cicada Partners has underwritten over $860 million, creating a combined track record of nearly $1.8 billion for deployment on XRPL. RLUSD's market cap of approximately $2.42 billion adds liquidity to the ecosystem.
As these credit rails mature, XRP is transitioning from a bridge asset into a core institutional collateral instrument.
