Ripple brings DeFi to institutions: New opportunity for XRP?

INFBusiness
23.09.2025
Markets

Ripple has introduced new tools designed to help institutional investors access DeFi applications on the XRP Ledger (XRPL). According to a press release, Ripple is introducing compliance, lending, and privacy features tailored to regulatory requirements.
Three new features are already live: Credentials, Deep Freeze, and Simulate. Credentials enable regulatory credentials such as KYC or accreditation to be stored directly on-chain. Deep Freeze allows issuers to freeze accounts of sanctioned addresses. Simulate offers the ability to pre-test transactions without publishing them on the ledger.
A key element of the roadmap is the introduction of a protocol-specific lending system. This will enable institutional investors to obtain loans directly via XRPL in a compliant and low-cost manner.
Defined in the XLS-65/66 specifications, the protocol brings pooled liquidity and signed loan agreements directly to the ledger layer. Institutions can access capital from global liquidity, while smaller investors gain access to yield opportunities.
In addition, Ripple is working on integrating zero-knowledge proofs (ZKPs). This will keep sensitive data confidential while meeting compliance requirements such as KYC and proof-of-reserves. Initial deployments are planned for early 2026.
Through these tools, Ripple aims to position XRPL as the leading platform for institutional DeFi. Brad Garlinghouse's company is addressing areas that professional investors had previously identified as barriers to entry.
In a report from last year, Deutsche Bank wrote: DeFi can only be successful for institutions if it integrates regulatory standards such as KYC, AML and digital identities.
In its announcement, Ripple left open whether the new DeFi applications will primarily use XRP or its own stablecoin, RLUSD. However, it is clear that all functions will run on the XRP Ledger. This should also indirectly benefit XRP, as every activity on the network requires transactions with the native token.

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