Ripple has partnered with Swiss financial institution Arf to bring RLUSD-powered settlement liquidity to the XRP Ledger, connecting the blockchain to a payments business handling approximately $10 billion in annual transaction volume.
Summary
- Ripple and Arf have partnered to introduce RLUSD-powered settlement liquidity for licensed cross-border payment companies on XRPL.
- Arf reports approximately $10 billion in annual settlement volume, with working capital turning over four times monthly.
- The initial service will provide short-term financing, typically repaid within one to five days.
- Arf plans to adopt XRPL’s native lending infrastructure after XLS-65 and XLS-66 receive validator approval.
- RLUSD will support settlement financing, while XRP will cover network transaction fees and applicable reserve requirements.
According to Arf’s October 22 announcement, the arrangement will provide short-term working capital to licensed cross-border payment companies, with the initial service operating before XRPL’s proposed native lending protocol becomes available.
Ripple and Arf bring settlement liquidity to XRP Ledger
The partnership focuses on payment companies that need funds available across different markets while they wait for transfers to settle.
Such businesses often maintain balances in multiple currencies and banking systems to complete international payments. Arf said conventional credit arrangements can require substantial collateral and take months to establish, creating difficulties when liquidity needs change between payment corridors.
Through the agreement, Arf will provide settlement financing denominated in Ripple’s dollar-backed stablecoin, RLUSD, using XRPL to support the movement of funds.
The initial service targets licensed payment institutions, including businesses handling remittances, card transactions and international transfers.
Arf’s existing financing model typically operates over one to five days. As payment transactions settle, borrowers repay the working capital, allowing the company to deploy it again for subsequent transfers.
Arf co-founder and CEO Ali Erhat Nalbant said the firm already manages approximately $10 billion in annual settlement volume, with its capital turning over four times each month.
“Through this partnership with Ripple, we’re bringing stablecoin working capital to the XRP Ledger,” Nalbant said.
The $10 billion figure covers Arf’s existing global settlement business. The announcement did not disclose a financing commitment, the amount of RLUSD allocated to the new arrangement or how much transaction volume will initially move through XRPL.
Arf plans to use XRPL’s proposed native lending protocol
The companies intend to introduce native onchain lending in a subsequent phase, once the XRP Ledger activates the required protocol amendments.
Two proposals form the basis of that infrastructure. XLS-65 would introduce Single Asset Vaults, allowing funds to be pooled and managed directly on the ledger.
XLS-66 would establish the Lending Protocol, enabling structured loans supported by those vaults.
Arf has already developed an implementation using the proposed specifications and will continue providing feedback as the technical rules progress.
However, the lending features have not received the validator approval required for mainnet activation.
As crypto.news reported on October 19, the LendingProtocol amendment had 19 supporting validators out of the 29 needed, while the companion SingleAssetVault proposal had 21.
XRPL amendments must maintain support above the required 80% threshold for two consecutive weeks before activation.
The network’s September software update introduced revised lending-related functionality, but distributing software does not automatically enable proposed amendments.
RLUSD will fund short-term credit while Arf manages underwriting
Under the proposed lending model, RLUSD would serve as the currency used to disburse loans and receive repayments.
Arf would continue handling borrower assessments, lending decisions and other working capital arrangements outside the blockchain.
The ledger would support the onchain management of funds and loan operations once the native protocol becomes available.
For participating payment companies, Arf’s existing infrastructure connects conventional bank accounts with stablecoin treasury services, allowing institutions to obtain financing without directly operating blockchain systems.
The company is based in Zug, Switzerland, and operates as a member of the VQF self-regulatory organization.
RippleX head of product Jasmine Cooper said XRPL’s settlement capabilities and RLUSD’s dollar-denominated structure suit payment companies that need temporary liquidity across borders.
Arf’s financing model falls within payment finance, or PayFi, which applies credit and treasury management services to payment flows.
The company has worked with Huma Finance in developing that market, combining payment-related receivables with blockchain-based financial infrastructure.
XRP Ledger lending plans await further validator support
The Arf agreement provides another proposed institutional application for XRPL’s lending system while the network continues its approval process.
In August, Ripple’s validator backed both lending amendments, adding support to proposals intended to introduce credit functionality directly into the ledger.
The proposed system separates onchain loan administration from offchain credit decisions, including identity checks, borrower assessments and legal agreements.
Under Arf’s arrangement, XRP would remain the network’s native asset for transaction fees and applicable account reserves. RLUSD would provide the dollar-denominated capital for settlement financing.
The announcement did not establish a direct requirement for participating payment companies to purchase XRP.
Arf said it will continue serving as a design partner for the Single Asset Vault and Lending Protocol specifications, with plans to migrate its financing activity to the native infrastructure once both amendments activate.
