Flare has announced that its FXRP token is now officially accepted as collateral in Sentora’s RLUSD vault, which operates on the Morpho protocol. This milestone allows users to borrow Ripple’s RLUSD stablecoin on Ethereum without liquidating their XRP holdings, enabling new options for accessing liquidity and participating in decentralized finance markets.
New pathway for XRP in DeFi lending
The updated integration enables XRP holders to convert their tokens into FXRP, Flare’s Ethereum-compatible representation of XRP. After bridging FXRP to Ethereum, users can deposit the token into Morpho’s lending protocol and borrow RLUSD, Ripple’s stablecoin pegged to the US dollar.
By using FXRP as collateral rather than selling their XRP outright, borrowers retain full price exposure to the underlying asset while securing dollar-denominated loans. This arrangement allows users to participate in DeFi lending products and manage risk without giving up potential upside on XRP.
Co-founder and CEO of Flare, Hugo Philion, emphasized the significance of this development.
Hugo Philion described XRP as one of the largest crypto assets, yet among the least utilized in decentralized finance, mostly due to limitations in available infrastructure. He noted that XRP is now collateral approved by an institutional risk team for use on Ethereum mainnet, calling it “a stronger form of recognition.”
Institutional review and risk management
Prior to FXRP’s approval as collateral, Sentora’s risk team conducted an extensive review of its market dynamics, including oracle design, liquidity levels, and liquidation mechanisms. The Morpho Blue lending platform, which underpins Sentora’s vault, uses isolated lending markets specifically structured to contain risk if issues arise with any single asset.
This model echoes established frameworks such as Wrapped Bitcoin (WBTC), which has enabled Bitcoin holders to access Ethereum-based lending without liquidating their BTC. FXRP is similarly intended to unlock new DeFi opportunities for XRP holders.
Growth of RLUSD and broader stablecoin acceptance
Ripple has consistently positioned RLUSD as an enterprise-focused stablecoin, targeting both cross-border payments and decentralized finance applications. In August 2024, the company began testing RLUSD on both Ethereum and the XRP Ledger. Regulatory approval followed in December 2024, with the New York Department of Financial Services giving the green light ahead of RLUSD’s official launch.
Ripple’s push for RLUSD adoption recently received a boost from Mastercard, which in May confirmed support for settlement of regulated stablecoins, including RLUSD, USDC, and SoFiUSD. This support is seen as an important step for wider integration of dollar-pegged assets in mainstream financial operations.
As decentralized finance continues to expand, platforms like 1stepSwap seek to further reduce barriers between traditional finance and blockchain technology. By moving real-world assets directly onto the blockchain, 1stepSwap enables users to hold shares of leading US companies and commodities such as gold and silver within their wallets. This eliminates complicated processes and intermediaries while ensuring that trades occur at the most favorable market rates, creating portfolio diversification through a streamlined user experience.
Commenting on FXRP’s approval, Sentora co-founder and CTO-CPO Jesus Rodriguez wrote that the move represents a “major step” in increasing XRP’s onchain utility.
Rodriguez explained that XRP, despite its large scale and liquidity, has until now seen limited use as collateral in onchain credit—something that he said is set to change with this integration.
