How Ripple Plans to Turn XRP Into the Collateral Layer of Institutional DeFi

Ripple is quietly repositioning XRP from a cross-border payments token into the backbone of institutional decentralized finance, according to senior company executives. The shift marks one of the most important strategic pivots in the asset’s history and could fundamentally reshape how Wall Street interacts with crypto-native infrastructure.

Speaking at a recent industry event, Ripple’s Ross Edwards outlined an expanding vision for XRP that stretches well beyond its original use case of moving value across borders. While centralized exchange liquidity has historically driven XRP utility, Edwards said the company is now aggressively pushing that activity onto the XRP Ledger itself.

A lending protocol changes the calculus

The centerpiece of that push is a native lending protocol currently being launched on the XRPL. The protocol positions XRP as a source of collateral and borrowing power, opening the door to yield-generating activity that has long been the domain of Ethereum-based DeFi platforms.

“We see XRP as a huge source of capital to be lending and borrowing and using as collateral positions on chains,” Edwards said, describing a dual utility play where XRP benefits both directly and indirectly from growing on-chain activity.

Stablecoins are the missing piece

Perhaps the sharpest insight from Edwards concerns the role of stablecoins in making institutional DeFi actually work. Without them, he argued, the entire structure collapses. A bank holding tokenized real-world assets on chain has no practical way to realize cash value without a dollar-denominated stable counterpart. KYC, AML, and legacy rails make the traditional route redundant.

Ripple’s answer is RLUSD, its own stablecoin, which Edwards described as central to a new generation of tokenized asset markets, including 24/7 swap markets, on-chain distributions, and institutional lending.

The conversation has shifted, Edwards said. Two years ago, Ripple was convincing institutions to tokenize assets at all. Now it is negotiating the mechanics of how those assets generate yield, settle instantly, and operate around the clock.

For XRP holders, that is a materially different story than payments alone.