Ripple and Arf partner to provide RLUSD settlement liquidity on XRP Ledger

Swiss-regulated financial institution Arf has partnered with Ripple to launch a short-term settlement liquidity service on the XRP Ledger (XRPL) using Ripple’s RLUSD stablecoin. The initiative aims to support licensed cross-border payment companies by providing working capital to bridge the gap between sending funds and receiving settlement.

Under the current model, Arf provides liquidity for short durations, typically between one and five days. This allows payment firms to settle transactions instantly without the need to maintain idle reserves or pre-fund destination accounts. Arf, which currently processes approximately $10 billion in annual global settlement volume, intends to use this partnership to expand its existing ‘PayFi’ (payment finance) model to the XRPL ecosystem.

The rollout will occur in two phases. The first phase involves Arf directly supplying RLUSD-denominated liquidity on the ledger. The second phase aims to transition these services to the XRPL’s native lending infrastructure once the necessary protocol amendments, specifically XLS-65 and XLS-66, are approved and activated by validators. In this future setup, RLUSD will be used for loans and repayments, while XRP will continue to serve as the network’s asset for transaction fees and reserve requirements.