Flare Brings XRP-Backed RLUSD Loans to Ethereum, Letting Holders Unlock Liquidity Without Selling

$XRP holders can now access Ripple USD ($RLUSD) liquidity on Ethereum without selling their $XRP.

The option became available after Flare integrated FXRP as collateral in Sentora’s institutional $RLUSD vault on Morpho.

The launch creates an isolated FXRP/$RLUSD lending market on Morpho Blue. Users can mint FXRP on Flare, bridge it to Ethereum, and borrow $RLUSD against their holdings in a permissionless and non-custodial way.

FXRP Becomes First $XRP Collateral Asset in Institutional Ethereum Vault

According to Flare, FXRP is the first $XRP representation approved as collateral in an institutionally curated lending vault on Ethereum mainnet.

The integration gives $XRP holders access to Sentora’s $RLUSD Main vault, which currently holds around $280 million in deposited $RLUSD. It is now the largest institutionally curated $RLUSD vault on Ethereum.

The new market allows users to keep exposure to $XRP’s price while unlocking liquidity through $RLUSD loans. Borrowers retain control of their collateral, with no custodial intermediary or whitelist required.

To use the service initially, users must mint FXRP through Flare’s FAssets protocol, bridge it to Ethereum, deposit it into the FXRP/$RLUSD market, and borrow $RLUSD within the market’s loan-to-value (LTV) limit.

Flare said a simpler process is in development through Flare Smart Accounts. Once launched, it will allow users to access the service directly from the $XRP Ledger.

Expanding $XRP’s Role in DeFi

Flare said the integration addresses one of the biggest challenges facing $XRP decentralized finance (DeFi): access to deep stablecoin liquidity.

The company noted that limited borrowing capacity has historically restricted FXRP-based strategies and reduced capital efficiency.

Flare highlighted the network’s growth after the launch of USDT0 as an example. Following the launch, total value locked (TVL) increased from about $37 million to more than $120 million within two weeks.

By connecting FXRP with institutional $RLUSD liquidity, Flare expects borrowing demand on Ethereum to create additional demand for FXRP minted through the FAssets protocol.

Institutional Review Clears FXRP as Collateral

Before approving FXRP as collateral, Sentora conducted a risk assessment that examined the asset’s behavior, oracle reliability, and available liquidity for liquidations and withdrawals.

Flare CEO Hugo Philion said the integration marks an important step for $XRP’s utility beyond payments.

“$XRP is one of the largest assets in crypto and one of the least used in DeFi. That gap came down to infrastructure. FXRP closed part of it by making $XRP programmable. This closes another part. $XRP is now collateral that an institutional risk team underwrites on Ethereum mainnet.”

Jesus Rodriguez, Co-Founder and CTO-CPO of Sentora, said enabling FXRP as collateral expands $XRP’s role in decentralized credit markets. In his words:

“By enabling FXRP as collateral in our $RLUSD vaults, we are bringing that scale into DeFi and expanding the productive utility of $XRP across onchain credit markets.”

More $XRP DeFi Integrations Ahead

Meanwhile, Flare said the current launch is the first step toward broader $XRP-backed lending options. Future updates include direct FXRP minting from the $XRP Ledger to Ethereum, removing the need for a separate bridging process.

Flare Smart Accounts are also expected to allow $XRP holders to borrow $RLUSD directly from the $XRP Ledger without using Ethereum interfaces.

The company added that Sentora’s approval could encourage other Morpho vault curators to adopt FXRP as collateral. This could increase the amount of stablecoin liquidity available to $XRP holders across decentralized finance.