XRP could gain a more direct role in institutional lending if emerging XRP Ledger credit models begin using the token as collateral against stablecoin loans. Jazzi Cooper, Head of Product at
XRP could gain a more direct role in institutional lending if emerging XRP Ledger credit models begin using the token as collateral against stablecoin loans.
Jazzi Cooper, Head of Product at RippleX, called “XRP as collateral for institutional credit” a “killer use case” in a Sept. 12 X exchange, adding that the concept can be supported by the XRP Ledger’s XLS-65 and XLS-66 lending architecture.
The comment followed a question about whether market makers and institutional traders could use XRP to secure credit lines.
Importantly, Cooper’s response should not be read as confirmation that institutions are already borrowing against XRP through XLS-65 and XLS-66 on mainnet. The native lending amendments are still progressing through the XRPL development and governance process.
XRP and RLUSD Could Form a Two-Pool Credit ModelCooper has previously described growing interest in a “dual pool” model in which one pool contains XRP as collateral while a second provides RLUSD as the loan asset.
In that structure, an institution could potentially pledge XRP while borrowing dollar-denominated liquidity without selling its XRP position.
That would resemble collateral transformation in traditional finance: an asset held on the balance sheet supports access to a more liquid funding instrument.
The concept fits Ripple’s broader push to turn XRP into institutional collateral, where Ripple Prime executives have already discussed digital assets being used for margin, settlement and secured financing.
It also adds a different XRP-specific layer to the Clearpool and Cicada credit market, which is being designed around RLUSD working-capital lending and XRPL’s native credit infrastructure.
But XLS-66 Is Not a Built-In Collateral Liquidation SystemThere is an important technical distinction.
The official XRPL Lending Protocol currently describes fixed-term, uncollateralized lending funded through Single Asset Vaults. Borrower underwriting and credit assessment occur off-chain, while loan origination and servicing are recorded on XRPL.
The protocol does not currently include automated onchain collateral management and liquidation comparable to lending systems such as Aave.
That means an XRP-backed credit product would likely require additional structuring around XLS-65 vaults, loan brokers or institutional risk-management arrangements rather than simply switching on an existing liquidation module.
ComponentPotential roleXRPCollateral assetRLUSDLoan / funding assetXLS-65Pools assets in Single Asset VaultsXLS-66Creates and services loansLoan brokerUnderwriting and risk parametersInstitutionBorrower or liquidity providerLending v1.1 Is Still Moving ForwardXRPL’s lending infrastructure is also undergoing another revision.
LendingProtocolV1_1 is currently listed as in development, with changes including closed-ended vault structures and updated cash-basis accounting. The original XLS-65 and XLS-66 amendments still require validator approval before full mainnet activation.
That governance hurdle remains central to the XRPL lending rollout.
So Cooper’s comment is significant less because XRP-backed institutional credit is already live and more because it clarifies a potential end-state: XRP could become productive balance-sheet collateral rather than simply an asset held or transferred.
