The XRP Ledger is one step closer to native lending — but not quite there yet. Validators are currently weighing two protocol amendments, XLS-65 and XLS-66, that would add single-asset vaults and fixed-term lending directly into the ledger’s core. If approved, these changes could open new institutional uses for XRPL assets — but activation still needs broad validator consensus and carries material credit and operational risks. Where the vote stands - Both amendments are live for validator voting but remain far from activation. An amendment must be supported by more than 80% of trusted validators for two consecutive weeks to take effect. Current support is well below that bar (recent snapshots showed roughly 34% and 37% backing). - Ripple’s validator voted in favor of both changes in August, but Ripple alone cannot force activation — validators decide on adoption, and their positions can shift over time. - The percentage shown in amendment records can change as validators update their votes; what matters is sustaining >80% for the required 14-day window. What the amendments would do - XLS-65 (Single Asset Vaults): Introduces vaults that pool a single asset (for example XRP, RLUSD/Ripple USD, or other XRPL assets) from multiple depositors and issue proportional vault shares. A vault manager would direct pooled liquidity according to preset rules. - XLS-66 (Fixed-Term Lending): Enables that pooled liquidity to be used for fixed-term loans. Crucially, the model depends on off‑chain underwriting instead of automatic on‑chain overcollateralization and liquidation common in many DeFi systems. Identity checks, credit assessments, negotiations, and legal reviews would occur outside the ledger, while the ledger would record and execute loan issuance, interest accrual, repayments and defaults. Why this matters — and what to watch out for - This design lowers reliance on complex application-layer smart contracts, but it does not eliminate credit, counterparty or operational risk. Depositors could still lose funds if underwriting fails or borrowers default. - Access and yield are not automatic for all XRP holders. Participation will depend on which vaults launch, the assets they accept, eligibility rules, jurisdictional limits and investor classifications. Some pools will likely be permissioned and available only to institutional or accredited participants. - XRP’s network role would remain transaction fees and account reserve currency. XRPL transaction fees are burned, so increased lending activity could marginally increase XRP burn, but fees are typically tiny and any meaningful impact on supply would require sustained high transaction volumes. Product development already underway - Firms are building while the vote proceeds. Clearpool is testing an institutional credit product on XRPL’s devnet that would originate RLUSD‑denominated working-capital loans to fintech and payment firms. - Cicada Partners would source and monitor borrowers and set lending terms; Clearpool provides the pool infrastructure. Ripple plans to invest as a limited partner alongside others but is not acting as a backstop — it will participate on the same terms as other investors. - Clearpool says its integration will use isolated markets managed by independent risk teams to reduce contagion risk across pools. - The fund’s size and Ripple’s exact commitment haven’t been disclosed. Because the amendments aren’t active, these products cannot yet run on XRPL mainnet. Security posture and limitations - The lending code has gone through formal verification and independent reviews. Halborn’s re-audit reported no critical or high‑risk vulnerabilities; it flagged one medium, two low and two informational issues that Ripple’s team resolved, accepted or acknowledged. - Audits cover technical behavior but do not assess whether loans will be repaid — institutional due diligence and underwriting remain essential. Next milestones and related items - The immediate technical milestone is validator approval: each amendment must cross 80% support and maintain it for 14 days. - Clearpool must complete devnet testing before any mainnet rollout. - Separately, a Federal Reserve master-account application submitted through Standard Custody could improve RLUSD settlement infrastructure if approved, though timing and outcome are uncertain. BNY remains the primary custodian for RLUSD reserves. Market context - XRP traded around $1.06 at the time of reporting. No verified price movement could be directly tied to the voting status. Bottom line If approved, XLS-65 and XLS-66 would give XRPL a native framework for pooled, institutionally oriented lending — expanding use cases for RLUSD and other XRPL assets. But adoption hinges on validator consensus and careful off‑chain underwriting. For XRP holders, the change could create new yield opportunities in some pools, but participation will likely be permissioned and contingent on strict compliance and risk controls. Read more AI-generated news on: undefined/news