Arf, a Switzerland-based settlement liquidity provider, and Ripple are partnering to deliver RLUSD-powered working capital to licensed cross-border payment companies on the XRP Ledger (XRPL). The arrangement is designed to supply short-term funding while international payments are in transit, addressing liquidity needs across multiple markets. Arf announced the partnership in an official statement.

Arf reports approximately $10 billion in annual settlement volume, with liquidity typically repaid within one to five days.

Short-Term Liquidity for Cross-Border Payments

Payment companies frequently need working capital available across multiple markets to pre-fund transfers while awaiting settlement. Traditional bank credit lines, however, can take months to establish and typically require substantial collateral. For licensed payment firms serving multiple corridors at once, rapid and repeatable access to short-term funding is consequently a core operational requirement, and it is the gap this partnership is built around.

Under the partnership, Arf and Ripple plan to use RLUSD, Ripple's dollar-backed stablecoin, to provide short-duration liquidity on XRPL. According to Arf co-founder and CEO Ali Erhat Nalbant, the company's model helps payment firms access capital while funds remain in transit.

Arf launched in November 2022 and has since reached roughly $10 billion in annual global settlement volume, with capital turning over about four times per month. The Zug, Switzerland-based company operates as a regulated financial institution and is a member of VQF. Its settlement liquidity is typically repaid within one to five days, allowing the same capital to support repeated payment flows.

XRPL Lending Protocol Could Extend the Arrangement

In the partnership's first phase, Arf will direct RLUSD settlement liquidity on XRPL. The two companies also plan to use the ledger's native lending infrastructure once it becomes available.

The proposed system includes Single Asset Vaults for pooling and managing capital onchain, with the Lending Protocol enabling that pooled capital to back structured loans. Arf would continue to handle underwriting and working capital decisions offchain.

Arf has already developed an implementation based on the proposed protocol. Before it can go live, the relevant amendments, XLS-65 and XLS-66, must pass XRPL's amendment process and reach activation on mainnet. On XRPL, amendments are proposed changes to the ledger's rules that take effect only after drawing sustained support from a large majority of the network's validators, so the progress of these two proposals is the milestone to watch for when the partnership's native onchain lending phase can begin.

Distinct Roles for RLUSD and XRP

Jasmine Cooper, Head of Product at RippleX, said XRPL provides the settlement infrastructure while RLUSD serves as the dollar-denominated asset used for working capital. Under the arrangement, RLUSD would support loan disbursements and repayments.

XRP, meanwhile, pays network transaction fees, and accounts and certain ledger objects require XRP reserves. Payment companies using the service would not need to operate directly onchain, as Arf supports treasury management between fiat currencies and stablecoins through bank accounts in major financial hubs.

Arf will continue to advise on the Single Asset Vault and Lending Protocol specifications ahead of any planned transition to the ledger's native infrastructure.