Can I borrow RLUSD against XRP without selling it?

The full answer

How does borrowing RLUSD against XRP work?

XRP itself is not pledged. Flare announced on 3 August 2026 that Sentora had added FXRP as a collateral asset in its RLUSD Main vault on Morpho, and that an isolated FXRP/RLUSD market was live on Morpho Blue in which XRP holders can borrow RLUSD against FXRP without selling their XRP [1]. U.Today reported the launch on 6 August 2026 as a permissionless lending market where users borrow RLUSD while keeping exposure to XRP [3].

Flare describes FXRP as a 1:1 representation of XRP, minted only after Flare’s data protocols verify the payment on the XRP Ledger and backed by an overcollateralized system of independent agents. Flare says the XRP backing it stays on the XRP Ledger, in a Core Vault that acts only on instructions from Flare’s smart contracts [2]. The page on what FXRP is and how much of it is used covers the token and its bridge in more detail.

Flare’s 3 August post sets out the borrower’s path [1]. The borrower mints FXRP on Flare, bridges it to Ethereum with Stargate, deposits it into the FXRP/RLUSD market and borrows RLUSD up to the market’s LTV. To get the FXRP back, the borrower repays the RLUSD plus accrued interest. Flare said that at launch the flow is EVM-native and users manage the position themselves [1]. Flare also described the access as non-custodial and permissionless: no counterparty holds the collateral and no whitelist gates entry [1].

Who approved FXRP as collateral, and what did Sentora check?

Flare said on 3 August 2026 that Sentora’s review covers how the collateral behaves, whether the oracle is reliable, and whether there is enough liquidity to handle liquidations and withdrawals. Flare said FXRP met that standard and is now subject to the same monitoring as every other collateral in the vault [1]. U.Today reported that Sentora assessed FXRP under its institutional risk framework, reviewing liquidity, market behavior, oracle design and liquidation mechanisms [3].

Flare called FXRP the first form of XRP approved as collateral in an institutionally-curated lending vault on Ethereum mainnet, and said Sentora’s RLUSD Main vault held $280M in deposited RLUSD as of 3 August 2026 [1]. Flare’s own post of 24 September 2026 reported $7.9M of RLUSD supplied against 10.6M FXRP collateral in the FXRP market on Morpho [2].

How much FXRP and RLUSD are in the market?

Flare said on 3 August 2026 that the market opened with a conservative initial supply cap that scales as usage and liquidity grow, as Sentora does with any new collateral [1]. On 24 September 2026 Flare reported that caps had been scaling with demand: the market opened at a $4M cap and stood at $7.85M, with $7.9M RLUSD supplied against 10.6M FXRP collateral [2]. In the same post Flare reported about 145.2M FXRP minted in total [2]. By our calculation, the 10.6M FXRP posted is about 7.3% of that.

Neither Flare post states how much RLUSD has been borrowed. RLUSD supplied is capacity that borrowers can draw on, not a count of loans outstanding. Morpho’s market page showed outstanding loans of $7.19M in this market on 29 September 2026 [7]. The page on how much credit is being created against XRP sets out why supplied lending capacity and credit drawn should not be treated as the same number.

What loan-to-value and liquidation threshold does the Sentora FXRP market use?

Flare’s 3 August post says each Morpho Blue market is defined by four parameters: collateral asset, debt asset, oracle and liquidation LTV. Markets are isolated, so a problem in one market stays inside it [1]. Flare’s February 2026 description of Morpho’s design says parameters such as LTV or liquidation thresholds are set once at creation [6].

Within that limit, borrowers choose their own loan-to-value. Flare says holders borrow “at their own LTV” [1], and U.Today reported that borrowers select their preferred ratio provided positions stay below the liquidation threshold [3]. If a position’s loan-to-value exceeds the liquidation LTV, Flare says external liquidators can repay the debt and claim the collateral [1].

Morpho’s market page showed a liquidation LTV of 77% for this market on 29 September 2026 [7]. The page on how much can be borrowed against XRP and who sets the haircut compares terms across lenders, and what happens to an XRP-backed loan if XRP’s price drops follows a liquidation step by step.

What interest rate do borrowers pay, and how has utilisation moved since opening?

Flare said on 3 August 2026 that interest accrues at the market’s rate, which adjusts with utilization [1]. Morpho’s market page showed a borrow rate of 6.11% (six-hour) and utilization of 91.08% for this market on 29 September 2026 [7]. The only movement Flare has published is the cap, which it reported rising from $4M at opening to $7.85M by 24 September 2026 [2].

What is the case against reading much into this market?

The FXRP figures on this page come from Flare, which runs the FAssets system that issues FXRP. U.Today’s 6 August report confirms the launch but gives no figures for FXRP posted or RLUSD supplied [3].

The loan carries price risk. The Coin Republic wrote on 18 September 2026 that RLUSD targets dollar stability while XRP carries market-price exposure [4]. A borrower owes a fixed amount of dollar-pegged RLUSD against collateral whose value moves with XRP, so a falling XRP price pushes the position toward the liquidation LTV.

The route also adds layers between the holder and the loan: FAssets minting, the Stargate bridge, the Morpho market and its oracle. Flare says FAssets shipped with four independent audits from firms including Zellic and Coinspect, and an Immunefi bug bounty [2]. The page on the risks of earning yield on XRP through AMM pools or wrapped XRP covers what audits do and do not cover.

Some holders want a route that skips wrapping. Bitcoin.com News reported on 11 September 2026 that Evernorth has named the XRP Ledger’s upcoming lending protocol as part of its strategy, targeting fixed-rate loans without wrapping XRP or moving assets to another blockchain, and that both required amendments remain subject to validator approval [5]. Clearpool’s proposed product on that protocol would denominate loans in RLUSD [5]. Whether that native route has gone live is tracked on is native lending live on the XRP Ledger yet.

The simpler paths are not live. Flare said on 3 August 2026 that a path through Flare Smart Accounts is in development and that direct FXRP minting from the XRP Ledger to Ethereum is under development [1]. In its 24 September post Flare listed signing from an XRP Ledger wallet and borrowing RLUSD against XRP as still ahead [2].

The next page on where XRP can be used as margin for futures, options and perpetuals covers those venues.