So recently there has been an interesting development from Ripple that many people might not be aware of. They are quietly repositioning XRP from just a cross-border payment token to a backbone for institutional DeFi. This is not a small change—this could fundamentally alter how Wall Street interacts with crypto infrastructure.

Ross Edwards from Ripple explains that their strategy now is much broader than before. Previously, XRP liquidity depended on centralized exchanges, but now they are aggressively pushing direct activity to the XRP Ledger. The goal? Make XRP a source of capital that can be borrowed and used as collateral for loans on-chain.

Now, the game-changing part here is the new native lending protocol launched on XRPL. This protocol positions XRP as a collateral and lending power source—basically opening the door to yield-generating activities that have traditionally been the domain of Ethereum-based DeFi platforms. Edwards describes this as a dual utility strategy where XRP benefits directly and indirectly from increased on-chain activity. Collateral for loans in this protocol will be key to value capture.

But according to Edwards, there’s a piece that has been missing all along: stablecoins. He argues that without stablecoins, the entire structure of institutional DeFi would collapse. Why? Because banks holding tokenized real-world assets on-chain need a practical way to realize cash value. Traditional routes with KYC and AML become irrelevant here.

Ripple has an answer: RLUSD, their proprietary stablecoin. This will be the core of the new generation of tokenized asset markets—complete with 24/7 swaps, on-chain distribution, and institutional lending. This stablecoin is essential to make collateral and loans in the ecosystem truly functional.

This narrative shift is quite significant. Two years ago, Ripple was still convincing institutions to tokenize assets. Now they are negotiating the mechanics—how those assets generate yield, settle instantly, and operate 24/7. For XRP holders, this is a completely different story from just payment utility. It’s about XRP as a fundamental collateral for decentralized institutional finance.