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XRP holders can now use their assets as collateral to borrow RLUSD on Ethereum, creating a new way to access liquidity without selling their XRP holdings.

The development comes after Flare, a blockchain built to expand XRP’s role in decentralized finance, announced that its wrapped XRP token, FXRP, has been approved as collateral by Sentora. The platform manages a $280 million lending pool centered around Ripple’s RLUSD stablecoin.

Under the new setup, users can lock FXRP into the lending market and borrow RLUSD against their XRP exposure. The move marks the first time an XRP-related asset has been accepted in the lending pool.

The new FXRP/RLUSD market operates through Morpho Blue as an isolated lending environment, allowing XRP holders to borrow funds without liquidating their positions. The market is open to all users and does not require permission or whitelist approval.

Before approving FXRP, Sentora evaluated several factors, including liquidity conditions, price oracle infrastructure, historical market behavior, and liquidation mechanisms. The asset will continue to undergo regular monitoring under the same risk standards applied to other supported collateral.

Currently, accessing the lending market requires multiple steps. Users must generate FXRP through Flare’s FAssets system, transfer the token to Ethereum via Stargate, deposit it into the Morpho pool, and borrow RLUSD based on their selected loan-to-value ratio.

Flare is working to simplify the process through Smart Accounts, which could allow users to complete the entire transaction directly from an XRP Ledger wallet. The company is also developing native XRP Ledger-to-Ethereum FXRP minting functionality.

Hugo Philion, co-founder and CEO of Flare, said XRP remains one of the largest crypto assets but has historically had limited utility across DeFi markets. He said institutional validation of FXRP through Sentora’s risk review represents a stronger milestone than simply adding another wrapped asset through a bridge.

The isolated structure of Morpho Blue was a key factor behind the approval. Each market operates independently with its own collateral rules, debt assets, oracle mechanisms, and liquidation settings, preventing problems in one pool from spreading across the wider lending platform.

The biggest test now is adoption. Flare has minted around 155 million FXRP so far, compared with Philion’s goal of attracting 5 billion XRP into its ecosystem within six months.

The FXRP/RLUSD market will initially launch with a conservative supply limit, according to Flare, with the cap expected to increase as demand develops. Further details on lending limits, liquidation levels, and oracle providers are expected to be disclosed as the market expands.