XRP Collateral Unlocks RLUSD Borrowing on Ethereum Without Sales
Flare's FXRP token has been approved as collateral for a $280 million RLUSD lending vault, enabling XRP holders to access Ethereum's credit markets.
XRP holders can now borrow Ripple's RLUSD stablecoin on Ethereum while retaining their token holdings. The integration, announced by Flare on Monday, allows users to convert XRP to FXRP, bridge it to Ethereum, and use it as collateral on the Morpho lending protocol to borrow RLUSD. This approach mirrors Wrapped Bitcoin, preserving borrowers' price exposure to XRP while accessing dollar-denominated liquidity.
Flare's chief executive Hugo Philion noted that XRP, despite being among crypto's largest assets, has seen limited decentralized finance adoption due to infrastructure gaps. The approval by Sentora—which operates the RLUSD Main vault—represents institutional recognition of FXRP as collateral, following review of market behavior, oracle design, liquidity, and liquidation mechanics.
The development advances Ripple's strategy to position RLUSD as an enterprise stablecoin. The company began testing RLUSD on Ethereum and the XRP Ledger in August 2024, received approval from New York's financial regulator in December, and gained Mastercard's commitment last month to support settlement of regulated stablecoins including RLUSD, USDC, and SoFiUSD.
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