XRPL Activates Permissioned DEX Upgrade to Boost Institutional DeFi Adoption

The XRP Ledger has gotten a new upgrade with the Permissioned DEX feature going live on the network. This feature aligns with Ripple’s institutional DeFi roadmap, which aims to onboard more traditional finance (TradFi) giants to the network.

Permissioned DEX Goes Live On The XRP Ledger

XRP scan data shows the upgrade is now live on the network, following validator consensus two weeks ago. This also follows the Permissioned Domains and Credentials upgrades, which went live two weeks ago.

As Ripple noted, these three upgrades go hand in hand to enable institutions to access compliant liquidity pools on the XRP Ledger. Permissioned DEXs are order books within the native DEX that only accept trades from accounts that meet domain requirements.

Furthermore, Permissioned Domains create a regulated environment for these institutions, ensuring that only users with the credentials to participate as a verified issuer can access it. Credentials are verifiable attestations of identity or compliance status, such as KYC and AML tools, which enable institutions to ensure that they do not trade with bad actors.

As such, these features serve as a bridge for TradFi’s entry into DeFi, enabling compliant access to on-chain liquidity. This move comes as more institutions continue to adopt blockchain technology. As CoinGape reported, BlackRock recently ventured into DeFi with the launch of its BUIDL token on Uniswap.

The XRP Ledger is also seeing institutional adoption, with TradFi giants moving to tokenize real-world assets on the network. Ripple recently partnered with Aviva Investors to launch tokenized traditional fund products on the XRPL.

As CoinGape reported, 63% of tokenized U.S. Treasuries are now on the XRPL, according to data from RWA.xyz. The Permissioned DEX upgrade is expected to boost the trading of these RWAs, as Ripple noted that it will enable secondary markets for RWAs or FX with full AML and KYC controls.

More Upgrades Expected On The Network

The XRP Ledger will see more upgrades this year as Ripple and other developers implement compliance-focused features to onboard more institutions. Some of these features focus on privacy to help secure transactions that these firms make.

XRPL Validator Vet recently spotlighted the Confidential Transfers feature, which helps keep account balances and transaction amounts hidden on the network. This came as Binance’s founder Changpeng “CZ” Zhao described privacy as the missing link for crypto payments adoption.

The lending protocol is another upgrade that will go live on the XRP Ledger this year. This feature will introduce pooled lending and underwritten credit directly on the network. Ripple stated that the loan issuance will be managed through on-ledger contracts between lenders and borrowers, while the underwriting and risk management will remain off-chain.