- Arf and Ripple plan to use RLUSD on XRPL to provide short-term settlement liquidity for licensed cross-border payment companies.
- Arf reports approximately $10 billion in annual settlement volume, with liquidity typically repaid within one to five days.
- Future integration with XRPL’s native Lending Protocol depends on approval of amendments XLS-65 and XLS-66 before mainnet activation.
Arf and Ripple are partnering to provide RLUSD-powered settlement liquidity to licensed cross-border payment companies on the XRP Ledger (XRPL). The arrangement will provide short-term working capital while international payments settle, addressing funding needs across markets. Arf reports about $10 billion in annual settlement volume, with capital turning over four times monthly.
Arf Uses RLUSD to Support Payment Settlement
Payment companies often need working capital available across multiple markets to pre-fund transfers while awaiting settlement. However, traditional bank credit lines can take months to establish and typically require substantial collateral.
Arf and Ripple plan to use RLUSD, Ripple’s dollar-backed stablecoin, to provide short-duration liquidity on XRPL. According to Arf co-founder and CEO Ali Erhat Nalbant, the company’s model helps payment firms access capital while funds remain in transit.
Arf launched in November 2022 and has since reached approximately $10 billion in annual global settlement volume. The Zug, Switzerland-based company is a regulated financial institution and member of VQF. Its settlement liquidity typically repays within one to five days, allowing capital to support repeated payment flows.
XRPL Lending Protocol Could Expand the Arrangement
In the partnership’s first phase, Arf will provide direct RLUSD settlement liquidity on XRPL. However, the companies also plan to use the ledger’s native lending infrastructure when it becomes available.
The proposed system includes Single Asset Vaults for pooling and managing capital onchain. The Lending Protocol would allow that capital to support structured loans. Arf would continue handling underwriting and working capital decisions offchain.
Arf has already developed an implementation using the proposed protocol. However, the relevant amendments, XLS-65 and XLS-66, must pass XRPL’s amendment process before activation on mainnet.
RLUSD and XRP Have Different Roles
RippleX Head of Product Jasmine Cooper said XRPL offers settlement infrastructure, while RLUSD provides a dollar-denominated asset for working capital. RLUSD would support loan disbursements and repayments.
Meanwhile, XRP pays network transaction fees, and accounts and certain ledger objects require XRP reserves. Payment companies would not need to operate directly onchain. Arf supports treasury management between fiat currencies and stablecoins through bank accounts in major financial hubs.
Arf will continue advising on the Single Asset Vault and Lending Protocol specifications before any planned transition to the native infrastructure.
