Ripple Backs Institutional RLUSD Credit Fund With Clearpool and Cicada

Ripple is backing a new institutional credit fund that will lend its $RLUSD stablecoin to fintech and payments companies on the $XRP Ledger, alongside lending platform Clearpool and credit manager Cicada Partners, per a release shared with CoinDesk.

How the fund will work

The fund will provide working-capital loans denominated in $RLUSD, with Cicada sourcing borrowers, setting loan terms and monitoring credit risk. Clearpool is building the infrastructure used to create and manage the lending pools, while Ripple provides capital as an investor alongside other institutions. Neither the size of the fund nor Ripple’s commitment was disclosed.

Cicada says it has underwritten more than $860 million of credit and will act as both fund general partner and credit-pool manager. Clearpool says it has facilitated more than $930 million of institutional loans since 2021. Ripple participates as a limited partner on the same terms as other investors rather than guaranteeing losses.

Still waiting on ledger upgrades

None of it is live on the $XRP Ledger’s main network yet. Clearpool is testing the integration on a development network, and the two ledger features underpinning the product, a lending protocol known as XLS-66 and single asset vaults under XLS-65, are still going through the network’s amendment voting process.

The lending protocol handles issuing and repaying loans directly on the ledger, while the vault system pools money from several lenders under a manager who decides where it goes, in this case Cicada.

An $RLUSD demand play

Borrowers receive $RLUSD and repay in it, which creates demand for Ripple’s dollar-pegged token while moving lending activity onto XRPL. $XRP itself is not what gets lent, however, as it solely covers transaction fees and the minimum balances the ledger requires accounts to hold.

The fund deepens Ripple’s push to build out $RLUSD, its dollar-pegged stablecoin that crossed $1 billion in market capitalization less than a year after launch, as a utility token for institutional finance rather than a retail payments play.

The plans come as $XRP rose almost 20% in the past 24 hours to $1.30 and is up 30% over seven days, part of a broad rally that has lifted every major token.