Ripple's XLS-65/66 Lending Protocol Positions XRP as Institutional Collateral Asset
A Ripple representative has publicly described the use of XRP as collateral for institutional credit as a key use case for the asset, citing the XLS-65 and XLS-66 lending protocol standards on the XRP Ledger. The protocol is designed to allow XRP to be locked as collateral, which would reduce the circulating supply available on open markets.
A Ripple representative identified institutional credit collateral as a primary use case for XRP, pointing to the XLS-65 and XLS-66 lending protocol being developed on the XRP Ledger. The protocol is intended to enable XRP to be used as collateral within institutional credit facilities, a function that would require the asset to be locked away from active trading.
The XLS-65/66 standards represent a technical framework on the XRPL designed to support on-chain lending. If adopted at scale by institutions, this mechanism would systematically remove XRP from circulating supply as it is posted as collateral against credit positions.
This development is being discussed alongside the ETF accumulation trend as a potential dual mechanism for supply reduction. The combination of ETF custody inflows and collateral locking through lending protocols is being cited as a structural supply dynamic worth monitoring.
Key facts
- •Ripple representative identified XRP as collateral for institutional credit as a key use case
- •XLS-65 and XLS-66 lending protocol standards cited as the technical foundation
- •Protocol designed to allow XRP to be locked as collateral on the XRPL
- •Institutional adoption of this mechanism would reduce circulating XRP supply