Ripple plans to let customers use XRP as collateral for payment financing, with 2027 rollout targeted

Ripple is developing a way for payment customers to use XRP held in lending pools as collateral for short-term financing, President Monica Long said at XRP Seoul on Oct. 3. The company has begun testing the model and is targeting a broader rollout in 2027.

The initiative is being developed alongside efforts to bring more payment activity onto the XRP Ledger (XRPL), with Ripple targeting a broader rollout in 2027.

The proposed XRP backed payment structure is aimed particularly at payment-service customers that regularly require short-term financing. During a fireside discussion with Christina Chan, Ripple’s Senior Director of Ecosystem Growth, Long said the company has already begun testing the concept.

Long added that the proposed model would involve XRP being supplied to lending pools and used as collateral to cover part of customers’ payment obligations.

XRP backed payment strategy connects credit with XRPL

The planned XRP backed payment system is part of a wider effort by Ripple to increase the amount of financial activity taking place directly on XRPL.

Ripple conducted a pilot during 2026 using the XRP Ledger’s decentralized exchange for payments. According to Long, the pilot produced useful results, and Ripple intends to scale the approach significantly in 2027.

The company’s experience with financial institutions also appears to have influenced the strategy. Long said institutions have raised concerns around permissioning, privacy and control when integrating decentralized exchange infrastructure directly into their operations.

Ripple’s approach is therefore increasingly focused on providing infrastructure that handles some of those complexities for customers.

The XRP backed payment model could consequently become one component of a broader institutional stack combining payments, credit and on-chain liquidity.

The XRP Ledger’s XLS-66 Lending Protocol describes an on-chain framework for fixed-term lending using pooled funds, while the related implementation remains subject to protocol development and amendment processes.

XRP backed payment plans reflect broader institutional shift

Ripple’s plans come as the company continues to position XRPL for institutional finance, including tokenization, custody, payments and credit markets. Ripple has separately highlighted lending, tokenized assets and compliance-oriented infrastructure as emerging use cases for the ledger.

Long said the attitude of financial institutions toward blockchain has also changed. In her assessment, institutions are moving away from simply questioning whether they should adopt blockchain technology and toward considering how to integrate it efficiently into existing financial infrastructure.

Regulatory developments are another factor Ripple associates with the changing institutional environment. Long said improved regulatory clarity has helped financial institutions become more comfortable exploring blockchain-based financial infrastructure.

The company’s institutional expansion in Asia also provides context. Ripple has announced partnerships involving Korean financial institutions, including Kbank, while its work with Kyobo has focused on tokenized government bond infrastructure.

The company is attempting to connect XRP with additional financial functions, including collateral, lending and institutional payments.

XRP backed payment model could strengthen XRP utility

A successful XRP backed payment rollout could give XRP another potential use within Ripple’s institutional ecosystem.

The proposed arrangement would allow eligible customers to obtain payment financing while XRP is used as collateral, potentially reducing the need to immediately sell the underlying asset to obtain liquidity.

However, the proposed system should not be confused with a completed product. Ripple’s comments indicate that credit-related pilots are underway and that the company is targeting activation in 2027.

The final structure, eligibility requirements, risk controls and scale of the service remain subject to implementation.

Long also linked Ripple’s broader strategy to what she described as a potential feedback cycle involving XRP’s utility and liquidity.

The XRP backed payment initiative therefore sits within a larger attempt to make XRPL infrastructure useful across multiple areas of institutional finance. Ripple is simultaneously pursuing payment expansion, tokenization, custody and lending-related capabilities.

The XRP backed payment concept provides a new potential application, but its eventual significance will depend on adoption, implementation and the performance of the underlying lending and payment infrastructure.

According to the source report, several amendments are scheduled for October 8–9, subject to sufficient validator support.

As Ripple develops its 2027 plans, the XRP backed payment initiative will be one of the areas to watch as the company seeks to connect XRP, XRPL lending and institutional payment activity.

The XRP backed payment model remains a planned expansion rather than a fully launched service, making execution and real-world adoption important factors for investors assessing its potential impact.