The XRP Ledger has moved towards its next phase of development, focusing on institutional finance use cases that combine lending, compliance, and privacy.
According to the official press release, recent upgrades and upcoming releases show how the network is positioning itself as a settlement layer for tokenised assets, stablecoin markets, and regulated financial activity. Over the past year, XRPL has introduced features designed to meet regulatory requirements. The addition of credentials, linked to decentralised identifiers, enables issuers to verify attributes such as KYC status or regulatory permissions without centralised intermediaries. Another tool, Deep Freeze, allows issuers to restrict transfers from flagged accounts, supporting obligations linked to sanctions and compliance oversight. A transaction ‘simulate’ function has also been launched to reduce operational risks for enterprises by allowing trial runs before settlement.
Earlier software releases added escrow functions for tokenised assets, permissioned decentralised exchanges, and improved transaction throughput. Officials from Ripple said these updates form part of a modular compliance stack that lets institutions set participation rules while maintaining transparency and decentralisation.
Lending protocol and zero-knowledge proofs
The most significant upcoming change is a native lending protocol expected in XRPL Version 3.0. This will provide pooled lending and underwritten credit at the ledger level, with on-chain processes covering loan issuance and repayment tracking. Representatives from Ripple described the protocol as a way to connect smaller pools of liquidity to institutional-sized borrowers while ensuring regulatory controls remain in place.
Looking further ahead, work is underway to add zero-knowledge proof functionality. The first application, scheduled for 2026, will be confidential multi-purpose tokens designed to support privacy-preserving collateral management. XRPL officials noted that the aim is to balance confidentiality with auditability, ensuring privacy features can coexist with regulatory demands.
