Ripple is supporting a proposed institutional lending market on the XRP Ledger that would use RLUSD as the borrowing asset for fintechs, payments companies and crypto firms seeking working capital. The project brings together Clearpool as infrastructure provider, Cicada Partners as credit manager, and Ripple as an investor in the fund alongside other limited partners.
The companies say the goal is to shift part of decentralized finance away from returns driven mainly by trading-related activity and toward income generated by loans to operating businesses. A launch on XRPL mainnet, however, still depends on governance approval for two protocol amendments now moving through the network’s voting process.
Three partners, distinct roles
Under the planned structure, Clearpool is building the lending rails, while Cicada will originate and oversee the credit. Ripple’s role is to provide capital and settlement infrastructure, but the company is not acting as a backstop for the loans.
The borrowing asset would be RLUSD, Ripple’s regulated dollar stablecoin. According to the companies, likely borrowers include fintech and payments businesses, as well as crypto companies that already use stablecoins in treasury operations and cross-border transactions.
A bid for business-driven DeFi yield
The firms argue that most DeFi yield still comes from market-based strategies such as looping, arbitrage, basis trades and liquidity incentives rather than from financing productive commercial activity. They estimate that about 98% of DeFi yield is generated through those market mechanisms.
The proposed XRPL market is designed to offer a different source of return. Instead of relying on crypto-native incentives, lenders would earn interest paid by businesses borrowing for real operating needs. For borrowers, the model is meant to add another pool of institutional capital while keeping settlement onchain.
What the infrastructure would use on XRPL
Clearpool, which says it has facilitated more than $930 million in institutional loans since 2021, plans to use XRPL’s proposed Lending Protocol, known as XLS-66, together with the Single Asset Vault framework, XLS-65. Cicada, which says it has underwritten more than $860 million, would serve as fund general partner and credit pool manager.
Its responsibilities would include sourcing borrowers, setting covenants and monitoring credit quality. The system is also expected to rely on XRPL features including Permissioned Domains, Credentials and Clawback so that access can be limited to verified participants and institutional compliance requirements can be supported. XRP would remain the ledger’s native asset for fees and reserves.
Mainnet timing depends on governance
The lending setup is not yet live on XRPL mainnet. Clearpool is currently testing the integration on Devnet while XLS-66 and XLS-65 continue through the amendment voting process on the network.
If those changes are approved and activated, loan issuance, repayments and vault accounting could run natively on XRPL instead of through external smart contracts. That next step is the main confirmed milestone before the initiative can move from testing into production and show whether XRPL can extend beyond its payments-focused identity into onchain private credit.
Source: news.bitcoin.com