Ripple Introduces XRPL Lending Protocol (XLS-65/XLS-66) for Institutional Collateral Financing

According to ChainCatcher, Ripple is advancing an institutional-grade lending protocol on XRP Ledger (XRPL) that enables institutions to finance using tokenized assets as collateral, with on-chain automation of loan mechanics and off-chain management of credit assessment by traditional financial institutions.

The proposal, called XRPL Lending Protocol (XLS-65 and XLS-66 standards), is currently in technical draft phase awaiting validator approval for mainnet launch; it is already available for developer testing on testnet. The protocol splits lending into two layers: on-chain fund pool management, interest calculation, repayment execution and default handling; while credit evaluation and loan terms remain with traditional finance institutions to comply with jurisdictional requirements. Ripple stated the mechanism primarily targets institutional short-term liquidity needs, such as interim financing through stablecoins or collateral assets ahead of settlement in cross-border payment scenarios.