The XRP lending race is already underway, even though the XRP Ledger’s native lending feature hasn’t launched. Ripple CTO Emeritus David Schwartz and Flare CEO Hugo Philion have sparked a friendly debate over just how big the opportunity could become.

The disagreement highlights a bigger question: should developers wait for native tools, or build lending infrastructure around the ledger now?

XRP Lending Could Unlock A Bigger Financial Market

Native XRP Ledger lending would let users lend and borrow assets directly on the blockchain. Validators are still voting on XLS-66, the proposal behind the feature, while XRPL Commons says lending is about to go live and has promoted a New York hackathon with lending and borrowing tracks.

Schwartz says nobody has built anything with the feature yet, leaving early developers plenty of room. He’s long viewed extending credit on the XRP Ledger as important, arguing lending is one of the biggest needs in any financial system.

Flare Wants To Build Before XRPL Upgrades

Philion praised Schwartz’s intelligence but argued he may underestimate lending’s potential. He also pointed to outside infrastructure that can connect to the XRP Ledger.

Flare plans to deploy lending logic on its own side rather than wait for major XRPL upgrades. Its approach combines Protocol Managed Wallets with the Flare Confidential Compute stack, aiming to deliver near-full smart-contract capabilities.

Native Wallet Access Could Avoid Bridge Risks

The proposed setup could let holders lend coins from native XRPL wallets without relying on traditional cross-chain bridges. That would keep assets closer to their native environment, while fees would flow to the Flare ecosystem.

For the XRP lending market, the competition is taking shape before native tools arrive. Schwartz sees room for developers to use the ledger’s existing capabilities; Philion is betting external infrastructure can expand what’s possible. The real test will be whether either approach turns the opportunity into usable lending products.