cpeditor
- Ripple is backing a new institutional credit fund that will use RLUSD to finance fintech and payments companies through the XRP Ledger, alongside Clearpool and Cicada Partners.
- The fund will issue working-capital loans in RLUSD. Cicada will identify borrowers, determine lending terms and oversee credit risk, while Clearpool will provide the technology needed to establish and manage the lending pools. Ripple will participate as one of the institutional investors.
- The fund’s overall size and Ripple’s planned contribution have not been disclosed.
- The project has yet to launch on the XRP Ledger’s mainnet. Clearpool is currently testing the integration on a development network, while the XLS-66 lending protocol and XLS-65 single-asset vault features required for the system are still undergoing XRPL’s amendment voting process.
- XLS-66 would support loan issuance and repayments directly on XRPL, while XLS-65 would allow capital from multiple lenders to be pooled and managed by a designated party. Cicada is expected to manage those funds.
- Cicada said it has previously underwritten more than $860 million in credit and will serve as both general partner and credit-pool manager for the new fund. Clearpool said it has facilitated more than $930 million in institutional loans since 2021.
- Ripple will invest as a limited partner under the same terms as other participants and will not guarantee against potential losses.
- Borrowers will receive RLUSD and repay their loans in RLUSD, potentially supporting demand for Ripple’s dollar-pegged stablecoin while expanding institutional lending activity on XRPL.
- XRP will not be used for the loans themselves. The token will continue to serve its standard role on the network, including paying transaction fees and meeting minimum account-balance requirements.
- The initiative arrives as XRP experiences a strong price rally, with the token rising nearly 20% in 24 hours to about $1.30 and gaining roughly 30% over the past week.
- XRP’s rally has coincided with a broader crypto market recovery following the U.S. Treasury’s announcement that it would double the size of its bond buyback operations.
