Ripple Partner Arf Brings Its $10 Billion Payments Lending Business to the XRP Ledger

Swiss payments lender Arf said on Thursday, October 22, that it is partnering with Ripple to lend the RLUSD stablecoin to licensed cross-border payment companies on the XRP Ledger, giving them working capital while their payments settle. It was the week’s biggest XRP news, yet XRP fell 4% that day, and the onchain lending tools Arf plans to use still lack the validator votes to switch on.

XRP trades at $1.32 on Friday, down 0.9% in 24 hours and 17% in a month. So what does Arf actually bring, and when will the XRP Ledger’s lending protocol arrive?

Cross-border payments move trillions of dollars every year, but the capital needed to move that money often remains tied up across markets.

That’s why we’re partnering with @Ripple to bring RLUSD-powered settlement… pic.twitter.com/M9RQqdITse

Short-term loans for payment companies. A remittance or card company sending money abroad often has to pay out at the destination before the sender’s funds arrive. That gap needs cash on hand in every market, and bank credit lines can take months to set up.

Arf’s settlement liquidity fills that gap with stablecoin loans that are usually repaid in one to five days, once the payment settles. The Zug-based firm, a Swiss-regulated financial institution, handles about $10 billion a year in settlement volume, with its capital turning over four times a month.

In the first phase, Arf will lend RLUSD directly on the XRP Ledger. The payment companies don’t need to touch a blockchain: Arf converts between fiat and stablecoins through its own bank accounts.

They are the XRP Ledger’s native lending tools. XLS-65 creates Single Asset Vaults, where lenders pool one asset such as RLUSD. XLS-66, the Lending Protocol, lets that pooled money go out as fixed-term loans. Arf would keep doing the credit checks offchain, while the money itself would be held and lent onchain.

XRP Ledger commentator Vet called it “XRP Ledger powering cross-border payments with on-chain credit,” adding that it “fixes tradFi inefficiencies.”

XRP Ledger powering cross border payments with on chain credit! It brings everything together and fixes tradFi inefficiencies.

🧵What is the settlement liquidity Arf is bringing and what does this mean for XRP, XRP Ledger and RLUSD. Especially for XLS-66 and… https://t.co/gTp5p4dyIg pic.twitter.com/zbu3gFi2L2

Neither tool is live yet. An amendment needs the support of 80% of trusted validators for two weeks before it activates. On the XRP Ledger amendment tracker, the Lending Protocol has 17 of 32 validator votes and Single Asset Vaults have 19, short of the 25 needed.

Until then, Arf will run the program with direct loans and move it onto the native protocol once XLS-65 and XLS-66 activate on mainnet.

How is this beneficial for XRP? RLUSD gains the most. It becomes the currency of every loan, from payout to repayment, and it needs the help of its home chain. RLUSD’s supply on the XRP Ledger has fallen to about $939.82 million from $1.05 billion a week ago, while its supply on Ethereum has grown to $1.46 billion.

For XRP, the link is indirect. Every XRP Ledger transaction pays a small fee in XRP, and accounts and objects such as vaults and loans lock up XRP reserves. Loans repaid every few days mean repeated transactions. But fees on the XRP Ledger are fractions of a cent, so the effect on demand stays small unless volumes become very large. Arf itself describes XRP’s role as supporting “the underlying network activity.”

The news didn’t lift the price. XRP climbed to $1.3992 on Wednesday, a one-week high, then dropped 4.1% on Thursday as Arf’s announcement went out, closing at $1.3094. It is now back near $1.32, inside the range it has traded in since mid-October.

Overhead, $1.332 to $1.353 is the first test, where the 4-hour 50 EMA meets the area Thursday’s drop broke through. Above that sits the bigger barrier: the daily 50 and 200 EMAs, bunched together between $1.371 and $1.374. XRP has closed both below every day since October 12, and Wednesday’s push above them failed within hours.

Below, $1.30 to $1.31 has held through Thursday and Friday. Losing it would put the October 18 low of $1.2562 back in play, the level that marked the bottom of this month’s slide. A daily close above $1.374 would open the way to Wednesday’s $1.3992 high and then $1.43.

The Arf deal is XRP news that matters beyond one day’s price: it gives the XRP Ledger a real lending customer with real payment volume. How much of that business actually runs onchain now depends on eight more validator votes.

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Established in 2013, 99Bitcoins' team members have been crypto experts since Bitcoin’s early days.

Alex is a seasoned cryptocurrency trader and market analyst with over seven years of active experience in the digital asset space. Since entering the markets in 2017, Alex has specialized in identifying emerging "meta" trends and high-volatility narratives. Notably, Alex... Read More