XRP Amendment Enters Voting After Protocol Update

What to Know:

• The XRP Ledger is initiating validator voting for its native XRP lending feature following the launch of XRPL version 3.1.0.
• This update introduces onchain lending and borrowing directly into the network, enabling users and institutions to access credit using XRP, RLUSD, and other assets without external smart contracts.
• The protocol aims to provide fixed-rate, fixed-term credit at the ledger level, using Single Asset Vaults to isolate risk and professional underwriting to replicate TradFi lending protocols, potentially attracting institutional interest and improving capital efficiency.

The XRP Ledger is on the cusp of a significant evolution with its native XRP lending feature entering the validator voting phase. This development, triggered by the launch of XRPL version 3.1.0, could redefine how institutions interact with the XRP ecosystem. By embedding lending and borrowing directly into the network, the XRP Ledger aims to offer a more secure and efficient platform for accessing credit using XRP and other assets.

Native XRP Lending Amendment up for Voting

The proposed lending amendment, dubbed XLS-66d, has been introduced to validators for approval. This system is designed to support fully native capital markets on the ledger, facilitating compliant borrowing and lending across multiple assets. While all validators initially held a negative position, this is typical at the start of the voting process. The market is watching closely to see if this amendment garners the required consensus.

Testing and Cross-Chain Opportunities

Industry experts emphasize the importance of thorough testing before the protocol’s large-scale deployment. Suggestions include extensive experimentation, incentive-driven devnet competitions, and user-friendly sandboxes to identify potential issues early. Furthermore, the native XRP lending protocol presents intriguing cross-chain opportunities, particularly with Flare. The ability to move FXRP from Flare to the XRP Ledger for lending and then back to Flare for additional yield could create productive liquidity loops between the two networks, enhancing overall capital efficiency.

I think there are a lot of interesting synergies with Flare possible, you could bounce FXRP back to the XRPL into a vault for lending and then possibly back on Flare for more yield.
— Vet (@Vet_X0) January 28, 2026

How the Native XRP Lending Protocol Expands XRPL’s Role

The introduction of fixed-term, fixed-rate credit directly at the network level could significantly expand the XRPL’s role. This moves it beyond a payments-focused blockchain into a broader financial platform. By supporting capital efficiency, risk-managed credit, and institutional-grade lending, the XRPL can attract a wider range of participants. The embedded lending logic within the protocol also mitigates risks associated with standalone smart contracts, offering a more secure environment for institutional investors.

Risk Control Measures

To ensure stability and security, the protocol employs several risk control measures. Single Asset Vaults separate liquidity by asset type, preventing risk from spreading across pools. Underwriters will assess borrower creditworthiness using real-world financial data, mirroring traditional finance practices. Additionally, pool administrators will commit first-loss capital to absorb early defaults, protecting lenders. These measures aim to provide a robust and transparent lending environment, crucial for attracting institutional capital.

Real-World Applications Could Drive Institutional Demand

The lending protocol opens up new funding options for various market participants. Market makers can borrow XRP or RLUSD to finance inventory and enhance liquidity. Payment companies can use RLUSD to bridge settlement delays and offer instant merchant payouts. Trading firms can gain leverage for hedged strategies, while fintech lenders can fund invoice financing and short-term working capital. These real-world applications could significantly drive institutional demand for XRP and RLUSD, further solidifying the XRP Ledger’s position in the digital asset space.

The XRP Ledger’s move to incorporate native lending is a strategic step towards attracting institutional interest and fostering a more robust ecosystem. While validator voting is ongoing and testing is crucial, the potential for enhanced capital efficiency and new funding opportunities positions the XRP Ledger as a platform to watch. The integration of risk control measures and the exploration of cross-chain synergies further underscore its potential to evolve beyond payments and become a comprehensive financial platform.

Related: XRP Targets $1.50 as Bitcoin Signals Bearish Control

Source: Original article