Ripple is pushing XRP Ledger to set up an institution-oriented chain-lending agreement to try to supplement the credit level in block-chain finance. It is envisaged that banks, payment agencies and marketers can use chain-held assets for financing, not just static holdouts.
The package currently consists of two technical standards: Single AssemblyVault (XLS-65) and Lending Protocol (XLS-66). Both are still awaiting the approval of the XRPL certifier, and the main network is not yet online, but the developers can access and test the devnet.
Clear division of labour between the two criteria
XLS-65 is mainly used to consolidate a single asset ' s liquidity along the chain, which is equivalent to a standardized financial pool container. According to the article, the design separates “storage liquidity” from “lending loans” to allow pool managers or underwriters to take bad risk and then provide liquidity from priority funds.
XLS-66 is responsible for translating liquidity in the pool into actual loans. Upon completion of the letter-based judgement and confirmation of the terms on-line, the chain system will enforce the pre-set rules of lending, interest-bearing, repayment arrangements and default treatment without manual interference or governance voting.
Let's get word to stay below the line.
The central philosophy of Ripple is that borrowers ' credit appraisals, compliance reviews, legal documents and collateral arrangements continue to be delivered to institutions for completion online, while block chains are only responsible for the implementation of established loan terms. The article argues that the block chain is suitable for rule enforcement and record-keeping, but not for determining the borrower ' s credit position and for dealing with regulatory requirements in different jurisdictions.
- How liquidity enters the pool
- How the loan was launched and interest-bearing
- Payment schedule and default
According to the article, this division of labour is intended to increase predictability. In the case of institutional funds, it is difficult for risk teams to complete letters of credit and pricing ahead of time if the rules of the agreement may change as a result of community governance voting.
Access permits
The agreement is not oriented towards a fully open retail lending market. Before entering a particular lending pool, the borrower and the financier need to complete a compliance check and then decide on eligibility and conditions for participation through a verifiable certificate.
This means that the XRPL network itself remains open, but the participation rights of specific credit pools will be controlled. The article distinguished this model from a fully open DeFi lending agreement and a fully closed licensing chain system.
Target payments and market financing
A direct scenario mentioned in the article is the short-term liquidity of payment agencies. If a payment service provider holds a RLSD reserve in the chain, but there is an approximately 48-hour interval between cross-border settlements, short-term borrowing can be made through an approved pool, based on anticipated repayments, without the need to use higher-cost bank credit lines or to sell assets at an inappropriate time.
In addition to the payment scene, the agreements are also geared towards financing the inventory of market vendors. Municipal institutions can obtain operating funds without selling core warehouses. The article also mentioned that the agency could base its downgrading of digital asset credit products on this executive level without having to build a lending system from scratch.
Additional information:XLS-65 and XLS-66 are still in the proposal stage and access to the XRPL main network is still dependent on the approval of the certifying officer; the article states that the relevant standards are ready for integration and testing on devnet.