XRP News: Ripple’s Lending Upgrade Is 10 Votes Short. What Happens to XRP if It Passes?

Ripple’s proposed XRP Ledger lending system has gathered 19 of the required 29 validator votes as of October 19, 2026, leaving it just 10 votes short of approval. Ripple has been pitching this system to banks and payment companies, and it plans to activate a set of bug fixes to improve its code around 09:34 UTC on October 23.

Currently, XRP (CRYPTO: XRP) is trading at $1.31, down 6.5% over the past week and 29.1% year-to-date. This decline suggests that traders have not factored in the potential impact of the upcoming upgrade. If the XRP Ledger lending system secures enough votes, what benefits might XRP holders gain?

What Ripple’s Lending Upgrade Entails and Who Reaps the Benefits

Validators are independent servers that confirm valid transactions. Any changes to the ledger’s rules, known as amendments, require over 80% of trusted validators to support them for two weeks before they can be implemented. The default trusted list has 35 validators, so the approval threshold is 29 votes, which the bug-fix package has already met.

The lending upgrade consists of two main components. The first is creating Single Asset Vaults, which aggregate deposits of a single token from multiple depositors; this part already has 21 votes. The second component is the Lending Protocol, which lets loan brokers lend from a vault to borrowers for a set period while recording every loan and repayment on the ledger; this currently has 19 votes.

The XRP Ledger developer documentation explains that these loans are fixed-term and don’t require collateral. Borrowers do not need to lock up any assets as security.

Brokers assess a borrower’s ability to repay off-ledger and can use their own funds as first-loss capital to cover defaults before depositors suffer any loss. Additionally, token issuers can retrieve funds from vaults and freeze accounts, which aligns well with the needs of regulated entities like Ripple.

Ripple, a private company that provides blockchain payment and custody services, also issues the Ripple USD (CRYPTO: RLUSD) stablecoin through its subsidiary, Standard Custody & Trust Company. The company has conditional approval for a national trust bank charter. However, Ripple does not share revenue details by business line, and the ledger destroys every transaction fee, meaning any lending income would likely come from services offered to institutions using the vaults.

Ripple’s Lending Upgrade Does Not Require XRP to Be Held

Interestingly, the lending system’s design doesn’t specify a loan currency, so a lender can deposit XRP or any other token into a vault.

For instance, a bank wishing to borrow U.S. dollars might choose to use a dollar stablecoin like RLUSD rather than a more volatile cryptocurrency like XRP, which suggests that the lending system might be successful even if XRP is not involved in the actual lending transactions.

Since there’s no collateral requirement, borrowers don’t need to lock up XRP either. XRP’s role is primarily to cover transaction fees and meet reserve requirements. The minimum fee for a standard transaction is 10 drops—a tiny fraction of one XRP. Every account must also maintain a 1 XRP reserve, plus an additional 0.2 XRP for each ledger object associated with that account.

While vaults and loans count as ledger objects (potentially increasing reserve demand), the impact on XRP’s overall demand is likely minimal. Similarly, a lending desk managing millions in RLUSD transactions would still incur only minor XRP fees, so increased ledger activity is unlikely to drive significant buying pressure on XRP.

Rival Lenders and Holdout Validators Stand in Ripple’s Way

The XRP Ledger faces tough competition from established players. Maple Finance runs an on-chain marketplace that connects institutional borrowers with lenders using USDC and USDT, while Aave Horizon on Ethereum (CRYPTO: ETH) allows qualified investors to borrow stablecoins against tokenized securities. Both platforms primarily operate with dollar-backed stablecoins, suggesting institutional borrowers generally prefer to borrow in dollars rather than native tokens.

However, Ripple’s biggest hurdle is the validators. To implement the lending system, Ripple must gain support from 10 additional validators. The fix package set for October 23 also aims to refine vault rounding and loan-default rules, underscoring that the lending code needs adjustments before it can be used.

So far, Ripple has not announced any banks committed to opening a vault once the system goes live, despite outreach to Korean banks and a U.S. bank adopting RLUSD.

Will XRP Benefit If the XRP Ledger Lending Upgrade Passes?

We think Ripple stands to gain far more than XRP itself if the lending upgrade is approved, and even its passage may not significantly influence the price of XRP. Ripple will have a product to offer banks, additional use cases for RLUSD, and stronger support for its trust-bank plans. In contrast, XRP holders may see only a few more fees burned and a small amount of XRP locked in reserves.

However, XRP vaults could allow depositors to earn yields on XRP if borrowers take out loans in XRP. The primary objective is for the lending amendment to reach 29 votes and maintain that support for two consecutive weeks.

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