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XRP Can Now Be Used as Collateral for RLUSD on Ethereum

Through Flare’s FXRP, XRP holders can now borrow RLUSD on Ethereum without selling their position. The market runs on Morpho Blue and falls under Sentora’s risk framework.

By Zenz van der Wielen
• 2 min read
XRP Can Now Be Used as Collateral for RLUSD on Ethereum

Key Takeaways

  • XRP holders can now use FXRP as collateral to borrow RLUSD on Ethereum without selling their position.
  • Sentora has added FXRP to an isolated FXRP/RLUSD market on Morpho Blue, with permissionless access.
  • The route runs through FAssets and Stargate; Flare is working on a simpler authorization flow through Smart Accounts and direct XRPL-to-Ethereum minting.

XRP holders can now put their coins to work as collateral and borrow RLUSD on Ethereum without having to sell. Flare told CoinDesk on Monday that Sentora has approved FXRP, the wrapped version of XRP, for use in its lending setup. Sentora oversees a $280 million (€243 million) lending pool in Ripple's stablecoin.

New FXRP Market

The approval creates an isolated FXRP/RLUSD market on Morpho Blue. In practice, that gives holders a way to borrow against their XRP exposure instead of exiting the position, and the market is open to anyone since access is permissionless and there is no whitelist.

Flare said Sentora evaluated FXRP through its institutional risk framework, looking at market behavior, oracle design, liquidity, and liquidation capacity. Once that review was complete, FXRP was placed under the same ongoing monitoring as the other collateral types in the vault.

How the Route Works

Using FXRP still involves a few steps for now. Users first mint FXRP through Flare's FAssets system, bridge it to Ethereum via Stargate, deposit it into the market, and then borrow RLUSD based on the loan-to-value ratio they want.

Flare says it is building a Smart Accounts flow that would eventually let holders approve the full process from an XRP Ledger wallet. The company is also working on direct minting from XRPL to Ethereum.

Why This Matters for XRP

The development is part of a wider effort to give XRP more utility in DeFi. Flare introduced FAssets in September 2025 so XRP holders could mint a trustless version of their coins, and it has since kept expanding an XRPFi ecosystem built around Ethereum-compatible apps.

For European crypto readers, the bigger point is that stablecoin lending and wrapped assets are starting to fit together inside more structured DeFi markets. Even so, the scale is still limited. Since launch, about 155 million FXRP has been minted, while Flare is targeting 5 billion XRP in six months. The new market also starts with a conservative supply cap that can be increased later if demand grows.

That lines up with a broader shift in DeFi, where protocols are adding tighter market access rules and clearer risk controls. For example, Uniswap launched permissioned pools for tokenized assets to let regulated assets trade under clear conditions.

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