XRP Stablecoin Solves Liquidity Dilemma: Holders Borrow, Keep Holdings

Flare Network and Enosys have announced the launch of the first stablecoin backed by XRP, a development that marks a significant milestone for the XRP Ledger and decentralized finance (DeFi) ecosystems. Built on Enosys Liquity V2, the stablecoin leverages XRP as collateral, with Wrapped Flare (wFLR) tokens serving as additional backing. Users can now lock their XRP in Collateralized Debt Positions (CDPs) to mint stablecoins, unlocking liquidity without selling their XRP holdings. This innovation enhances XRP’s utility in DeFi, positioning it as a key asset for decentralized applications and global settlement layers Flare Network Introduces XRP-Backed Stablecoin, Enhancing Liquidity^[1].

The system relies on Flare’s Flare Time Series Oracle (FTSO), a decentralized oracle that aggregates price feeds from independent signal providers to ensure secure and accurate pricing mechanisms Flare Network and Enosys Introduces First-ever XRP Backed Stablecoin^[2]. By integrating Liquity V2, the borrowing process becomes more efficient, enabling users to access liquidity while maintaining exposure to XRP. The stablecoin’s over-collateralized structure, combined with stability pools that manage liquidation risks, ensures the peg remains stable. Participants in stability pools earn rewards in the form of Flare tokens (rFLR), incentivizing broader adoption and ecosystem growth Flare launches first XRP-backed stablecoin - Cryptopolitan^[3].

For XRP holders, the stablecoin opens new avenues for participation in DeFi. Users can now employ their XRP in decentralized applications for payments, trading, and yield generation without liquidating their positions. According to Hugo Philion, CEO of Flare Network, “This stablecoin enables XRP to play a key role in the emerging digital economy, especially in the DeFi space.” The development aligns with XRP’s growing adoption, as evidenced by the XRP Ledger’s recent milestone of surpassing 7 million active accounts, a sign of expanding network activity and utility Flare Network Introduces XRP-Backed Stablecoin, Enhancing Liquidity^[1].

The launch underscores Flare Network’s strategy to expand XRP’s role beyond cross-border payments into DeFi. By creating a bridge between XRP and decentralized financial systems, the platform addresses a critical challenge in crypto markets: the need to sell assets to access liquidity. Instead, XRP holders can borrow stablecoins against their collateral, maintaining ownership while leveraging their assets for DeFi opportunities. This approach not only preserves XRP’s value but also fosters innovation in decentralized finance Flare Introduces XRP-Backed Stablecoin - coinnews.com^[4].

The integration of XRP into DeFi ecosystems is further supported by Flare’s interoperability framework, which connects the XRP Ledger with broader blockchain networks. Early adopters, such as Everything Blockchain, have already utilized Flare’s XRP DeFi infrastructure to manage their crypto treasuries, signaling real-world applicability. As the DeFi landscape evolves, the XRP-backed stablecoin offers a scalable solution for liquidity provision, asset management, and cross-platform transactions Flare launches first XRP-backed stablecoin - Cryptopolitan^[3].

With this launch, Flare Network reinforces XRP’s position as a foundational asset in the digital economy. The collaboration with Enosys and the adoption of Liquity V2 highlight the platform’s commitment to innovation and user-centric design. As the XRP Ledger continues to grow, the stablecoin is expected to drive further adoption of XRP in DeFi, enabling a more interconnected and efficient financial ecosystem Flare Network Launches XRP-Backed Stablecoin - BTCC^[5].