Major XRP Ledger Upgrade Targets Institutional Adoption But There’s a Catch

XRPL has released version 3.3.0, which takes another step toward becoming infrastructure for institutional tokenization.

It introduces several proposed amendments focused on privacy, payments, and managing real-world assets (RWAs).

Confidential Transfers

Perhaps the most significant new feature is called Confidential Transfer. It’s designed to allow institutions to hide balances and transaction amounts for Multi-Purpose Tokens (MPTs) while keeping the accounts and the asset type involved visible. It uses cryptographic proofs to verify that transactions are valid without publicly revealing the underlying amounts.

According to the GitHub post and previous reports on the matter, this could address an important obstacle for financial institutions, which may want the transparency and settlement benefits of a public blockchain without exposing sensitive position sizes or transaction values.

Data from RWA.xyz shows that roughly $850 million out of the $1.38 billion in RWA distributed on the XRPL is from Ripple’s own stablecoin, RLUSD. This leaves approximately $530 million in other tokenized assets from other big names in the niche, such as Ondo, Archax, Societe Generale, and VERT Capital.

Other Proposals

Aside from Confidential Transfers, the other updates named in version 3.3.0 include Batch, Sponsor, and Permission Delegation. The first amendment would allow up to eight transactions to be grouped together, including an atomic mode in which either all transactions succeed or the entire batch fails. This is expected to benefit complex settlements, swaps, and institutional transactions.

Sponsor is designed to enable one account to cover another user’s transaction fees and reserve requirements. In other words, it could allow companies to onboard customers without requiring them to purchase XRP before interacting with an application.

The last one would enable account holders to grant another party pre-defined transaction permissions without surrendering full control of the wallet. It would align with Dynamic MPT and provide issuers with greater flexibility by allowing certain token characteristics to be modified after issuance.

It’s worth noting that these amendments are not live on the XRP Ledger Mainnet yet, as the governance process requires each to maintain support from at least 80% of trusted validators for two consecutive weeks before activation.