Ripple says compliance controls will unlock DeFi, but XRPL liquidity is still too thin to prove it

Ripple is working to make decentralized finance more familiar to regulated institutions and is placing XRP at the center of that effort. DeFi’s earlier growth cycles were built around open, retail-facing liquidity pools and the associated risk tolerance. Total value locked across major protocols climbed into the tens of billions of dollars and, at previous peaks, surpassed $100 billion. Ripple’s pitch is that the next phase will be shaped less by permissionless pools and more by controlled access, compliant settlement, and tokenized cash and collateral that institutions can recognize as market infrastructure. In a February blueprint, Ripple described an institutional DeFi stack on the XRP Ledger (XRPL) that centers on stablecoin settlement, tokenized collateral, compliance controls, and an on-ledger credit layer, which is planned for later this year. Rather than competing with the largest DeFi hubs on raw totals, Ripple is emphasizing primitives that align with how institutions already organize markets, including identity, access control, cash flows, and collateral settlement. Cash and collateral are scaling A key part of Ripple’s framing is that the most durable activity may sit outside traditional DeFi totals. Tokenized cash equivalents and high-grade collateral have expanded sufficiently to continue attracting attention even as speculative activity cools. RWA.xyz, which tracks tokenized real-world assets, reported a represented asset value of about $21.41 billion and a distributed asset value of nearly $23.87 billion. Its tokenized US Treasuries dashboard showed a total value of around $10.0 billion. Ripple is positioning XRPL to align more closely with those flows. The blueprint highlighted features to support tokenized instruments and delivery-versus-payment workflows, while keeping access controls and compliance tooling close to the base layer. Meanwhile, the extent to which large tokenization remains contested. McKinsey has estimated that tokenized market ...