XRP's DeFi Breakthrough: Stablecoin Lets Holders Trade Without Selling

Flare Network has launched the first XRP-backed stablecoin, marking a significant milestone in expanding XRP’s utility within decentralized finance (DeFi). The stablecoin, built on Enosys’ Liquity V2 protocol, leverages XRP as collateral and utilizes Flare’s Flare Time Series Oracle (FTSO) for decentralized pricing. This development enables XRP holders to mint stablecoins without selling their holdings, preserving long-term exposure while accessing liquidity for DeFi activities such as lending, trading, and stakingFlare Unveils First XRP-Backed Stablecoin, Boosting XRP’s Utility^[1]. The system operates through Collateralized Debt Positions (CDPs), allowing users to lock XRP or tokenized assets to generate stablecoins. Initially, the stablecoin is pegged to XRP on Flare (FXRP) with Wrapped Flare tokens (wFLR) as collateral, with future plans to integrate staked XRP (stXRP) and other FAssets.

The launch coincides with growing adoption of the XRP Ledger (XRPL), which now hosts over 7 million active accountsFlare Unveils First XRP-Backed Stablecoin, Boosting XRP’s Utility^[1]. This milestone underscores increasing trust in XRP as a settlement layer for stablecoins and DeFi applications. Flare CEO Hugo Philion emphasized the stablecoin’s potential to unlock XRP’s value in the digital economy, including NFT transactions and decentralized lendingFlare Unveils First XRP-Backed Stablecoin, Boosting XRP’s Utility^[1]. The protocol also introduces incentives for participation, such as reward Flare tokens (rFLR), to drive adoption within the ecosystem.

Enosys’ Liquity V2 fork integrates core features like stability pools and FTSO-powered pricing, ensuring transparency and security. The system allows users to mint stablecoins while maintaining exposure to XRP’s price action. By reworking Liquity’s Ethereum-based model for Flare, Enosys has expanded XRP’s role in DeFi, enabling scalable liquidity provision and cross-chain interoperabilityFlare Unveils First XRP-Backed Stablecoin, Boosting XRP’s Utility^[1]. The stablecoin’s design aligns with Flare’s broader vision of transforming XRP into a DeFi-ready asset, supported by partnerships with institutions like Everything Blockchain and BitGoFlare Unveils First XRP-Backed Stablecoin, Boosting XRP’s Utility^[1].

The stablecoin’s impact is already evident in Flare’s DeFi ecosystem. Total Value Locked (TVL) has surpassed $85 million, driven by the growth of stablecoin liquidity and the introduction of USD₮0, an omnichain stablecoin backed 1:1 by Ethereum-based USDT. This innovation allows XRP holders to create deep trading pools and collateralize loans while tapping into $140 billion of USDT liquidityFlare price rockets 10% amid growing XRP DeFi use …^[2]. The Flare network’s TVL growth and rising spot volume—exceeding $19.5 million—have contributed to a 10% surge in the FLR token price, reflecting market confidence in the platform’s utilityFlare price rockets 10% amid growing XRP DeFi use …^[2].

Analysts highlight the strategic importance of XRP’s integration into DeFi. By enabling XRP holders to access liquidity without liquidating their holdings, the stablecoin addresses a key limitation of non-smart-contract tokens. The CDP mechanism ensures overcollateralization, reducing redemption risks while maintaining stablecoin pegs. Additionally, the use of FTSO for pricing minimizes reliance on centralized oracles, enhancing security and decentralization. As XRP adoption continues, the stablecoin could solidify the XRPL’s role as a global settlement layer for cross-chain financial applicationsFlare Unveils First XRP-Backed Stablecoin, Boosting XRP’s Utility^[1].