Ripple and Arf Bring RLUSD Settlement Liquidity to the XRP Ledger

Arf, a Swiss settlement lender, is teaming up with Ripple to offer licensed cross-border payment companies short-term working capital in RLUSD, Ripple's dollar stablecoin, on the XRP Ledger. The partnership was announced on 22 October.

The most interesting detail is who doesn't have to change anything. According to Arf, payment companies "do not need to operate onchain to benefit." The blockchain sits underneath the service, not in front of the customer.

How the RLUSD Loans Work

Cross-border payments take time to settle, and a payment company needs money in place while they do. Arf's product fills that window. It lends short-duration settlement liquidity that is typically repaid within one to five days, as the payments complete.

In the first phase of the deal, Arf will provide that liquidity directly in RLUSD on the XRP Ledger.

Arf CEO Ali Erhat Nalbant framed it as a working capital play: "Through this partnership with Ripple, we're bringing stablecoin working capital to the XRP Ledger to help payment companies bridge that gap and support more payment volume."

Jasmine Cooper, Head of Product for RippleX at Ripple, is quoted in the same announcement: "Settlement liquidity is exactly the kind of use case XRPL and RLUSD are built to support."

What Arf Brings, and What It Hasn't Said

Arf is headquartered in Zug, Switzerland. It describes itself as a Swiss-regulated financial institution and a member of VQF, a Swiss self-regulatory organisation.

The company says it has scaled to $10 billion a year in global settlement volumes since launching in November 2022, with its capital turning over four times a month. That turnover figure explains the model: the same pool of money gets lent, repaid and lent again several times a month.

Two caveats matter here. The $10 billion is Arf's own figure for its whole business, not an amount committed to the XRP Ledger. And the size of the RLUSD liquidity Arf will place on XRPL has not been disclosed.

The Second Phase Depends on XRPL's Lending Protocol

The bigger plan is still a roadmap item. Once the XRP Ledger's native lending infrastructure is available, Arf intends to bring more of its settlement liquidity activity directly onto the protocol.

That infrastructure includes Single Asset Vaults and the Lending Protocol. Neither is live on mainnet yet. Both must pass XRPL's amendment process first, and Arf says it will move the program over once the Lending Protocol amendments, XLS-65 and XLS-66, activate on mainnet. Until then, it acts as a design partner. No activation date has been confirmed.

There's a deliberate split in the design. Even after more activity moves onchain, Arf plans to keep underwriting offchain. In plain terms, the lending can run on the ledger, but deciding which payment companies qualify for credit stays with Arf.

Where XRP Fits

The loans are in RLUSD, not XRP. Arf's announcement still spells out XRP's role: transactions on the XRP Ledger require fees paid in XRP, and accounts and certain ledger objects carry XRP reserve requirements.

So any activity this program adds to the ledger uses XRP for fees and reserves, even though the money being lent is a dollar stablecoin.

The deal adds to a string of RLUSD settlement partnerships, after DriveWealth picked RLUSD for settlement in Europe. The next thing to watch is the XLS-65 and XLS-66 amendment process. Until those amendments activate, Arf's onchain lending plan remains a plan.