Native XRP Lending Amendment Enters Validator Voting Following XRPL v3.1.0 Release

The XRP Ledger has officially moved the native XRP lending feature into the validator voting phase after launching XRPL version 3.1.0. 

Notably, the update brings onchain lending and borrowing directly into the network, which would allow users and institutions to access credit using XRP, RLUSD, and other issued assets without relying on external smart contracts.

The new protocol will include fixed-rate, fixed-term credit at the ledger level, using Single Asset Vaults to isolate risk and professional underwriting to replicate TradFi lending protocols. It seeks to attract yield for XRP holders and improve capital efficiency for institutions.

• Validators have begun voting on the native lending amendment, with all initially set to the default Nay positions as the process starts.
• The protocol will enable direct onchain lending and borrowing for XRP, RLUSD, and future assets without external smart contracts.
• It will rely on a fixed-term, fixed-rate credit feature to offer predictable institutional-style financing on the XRP Ledger.
• With this feature, market makers, payment firms, traders, and fintech lenders could see new funding tools for liquidity, payouts, and working capital.

Native XRP Lending Amendment up for Voting

Vet, an XRPL dUNL validator, shared the news on X, revealing that the latest software release brought in the long-anticipated lending amendment, dubbed XLS-66d, and opened it for approval.

Vet highlighted that the system supports fully native capital markets on the ledger and allows compliant borrowing and lending across multiple assets. He also noted that development efforts remain ongoing as the ecosystem prepares for broader adoption.

At the time of reporting, the amendment had just gone live for voting, with all 34 validators still set to their default negative position, which typically changes as voting progresses.

Testing and Cross-Chain Opportunities

Reacting to the development, Panos Mekra, CEO of Anodos Finance, said the community and developers must test the protocol before large-scale use. He suggested extensive experimentation, incentive-driven devnet competitions, and a user-friendly sandbox where participants can explore the system’s mechanics and identify issues early.

Meanwhile, speaking on how the native XRP lending protocol could affect Flare, which already runs third-party lending services using FXRP and Firelight, Vet suggested that both features could complement each other. Notably, Flare CEO Hugo Philion made similar accounts around smart contracts on the XRPL.

Vet explained that users could move FXRP from Flare back to the XRP Ledger for lending within vaults and later return it to Flare to seek additional yield, creating productive liquidity loops between the two networks. 

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

For the uninitiated, the XRPL Lending Protocol will introduce fixed-term, fixed-rate credit directly at the network level, giving institutions access to predictable onchain financing. The system will rely on underwritten credit structures similar to traditional financial markets instead of volatile DeFi interest rates.

This protocol could push the XRPL beyond a payments-focused blockchain into a financial platform that supports capital efficiency, risk-managed credit, and institutional-grade lending. It could also open up new income opportunities for XRP holders by allowing them to lend assets into structured facilities.

Interestingly, the XLS-66d amendment embeds lending logic directly into the protocol, and this helps remove many of the risks tied to standalone smart contracts. The ledger itself now governs borrowing terms, repayments, and authorization.

Risk Control Measures

The protocol will operate through Single Asset Vaults, which separate liquidity by asset type. Each vault holds only one asset, such as XRP or RLUSD, and this prevents risk from spreading across pools. 

The amendment also employs risk controls similar to traditional finance. Specifically, underwriters will assess borrower creditworthiness using real-world financial data before issuing loans. 

In addition, pool administrators will also commit first-loss capital, which absorbs early defaults and protects lenders. Moreover, borrowers can operate within isolated vaults, so one failure does not impact unrelated participants. 

Also, every loan and repayment records directly on the ledger and gives institutions real-time transparency, simpler audits, and stronger compliance oversight.

Real-World Applications Could Drive Institutional Demand

The lending protocol could open up new funding options for market makers, payment service providers, trading firms, and fintech lenders. Notably, market makers can borrow XRP or RLUSD to finance inventory, run arbitrage strategies, and bolster liquidity without locking up their own capital.

Also, payment companies can borrow RLUSD for short periods to bridge settlement delays and offer instant merchant payouts across borders. Meanwhile, trading firms could gain predictable leverage for hedged strategies, while fintech lenders could use RLUSD to fund invoice financing and short-term working capital for small businesses.