Ripple Invests in RLUSD-Backed Institutional Credit Fund for Fintech Loans on XRP Ledger

Ripple is investing in an institutional credit fund that will use its RLUSD stablecoin to provide working-capital loans to fintech and payments companies.

CoinDesk reported on Aug. 21 that Ripple, lending platform Clearpool and credit manager Cicada Partners are working to build an institutional lending product on the XRP Ledger, or XRPL.

The fund is designed to provide working-capital loans in RLUSD to fintech and payments companies. Cicada will source borrowers, set loan terms and manage credit risk. Clearpool will build the infrastructure to raise and manage lending capital. Ripple will supply capital as an investor alongside other institutional backers.

The fund's size and Ripple's exact investment were not disclosed. Ripple will participate as a limited partner on the same terms as other investors and will not guarantee loan losses.

The service is not yet live on the XRP Ledger mainnet. Clearpool is testing the integration on a development network, while the lending protocol XLS-66 and the single-asset vault feature XLS-65 are also going through the network's voting process for adoption.

The loans will be issued in RLUSD, not XRP. Borrowers will receive RLUSD for working capital and repay the loans in RLUSD. XRP will be used for transaction fees and minimum reserve requirements needed to operate accounts on the XRP Ledger.

XRP recently traded at $1.30 after rising about 20% in the past 24 hours amid a broader rally in the crypto market. The token is up about 30% over the past seven days.