Ripple is taking a bold step to make the XRP Ledger more appealing to traditional finance institutions. A new Permissioned DEX is now live on XRPL, offering a gateway for banks and other regulated entities to engage with decentralized finance while sticking to compliance standards. This move targets a long-standing issue in crypto: bridging the gap between institutional needs and the open nature of DeFi.
A Closer Look at XRP Ledger’s Permissioned Exchange
SBI Group CEO Yoshitaka Kitao shared an update on X, highlighting a new type of decentralized exchange. Unlike public DEXs, this version is restricted, as only pre-approved institutions are allowed to participate. These entities are placed on an allowlist and can only trade with others in the same permissioned domain. The setup is designed to meet strict compliance standards while offering access to blockchain-based systems.
Permissioned but Still Open to Major Crypto Assets
Despite being restricted to vetted users, the DEX isn’t limited to closed systems. It still allows the trading of open, permissionless assets, such as XRP, stablecoins, and wrapped cryptocurrencies. That balance between regulation and flexibility makes the platform far more usable for financial institutions. Each DEX operates independently on the XRP Ledger and can support an unlimited number of trading pairs, offering scalable, compliant access to DeFi.
Ripple Brings Regulated DeFi to XRPL
With that, Ripple is positioning its latest development as a practical gateway for institutions to tap into decentralized finance without running into regulatory roadblocks. According to the company, the new setup on the XRP Ledger enables organizations to exchange assets or transfer value while remaining fully compliant and scalable, without compromising the core principles of decentralization.
The goal is to make DeFi usable in the real world, not just in theory. Ripple views this as a solution for major financial operations, including foreign exchange swaps between stablecoins and fiat currencies, cross-border business payments, contractor and payroll disbursements, and managing corporate treasury functions.
XRPL Sidechains Enable Specialized Use Cases for Finance
Ripple developers have introduced sidechains to the XRPL to enable custom features, such as KYC enforcement and smart contract capabilities, without affecting the mainnet. These sidechains could host custom, permissioned exchanges or services that cater to niche financial sectors, such as insurance, lending, or derivatives.
Can Ripple Solve DeFi’s Compliance Problem?
This may not garner headlines like a price spike, but it’s a strategic move with long-term implications. One of the biggest reasons banks and large firms have avoided decentralized finance is the lack of guardrails. Ripple is flipping the script by introducing a version of DeFi that speaks the language of compliance and control, precisely the things traditional institutions require.
By utilizing the XRP Ledger as its foundation, this setup enables fast and low-cost trades without relying on third parties. It’s not just a technical upgrade—it’s a signal that institutional DeFi is no longer a contradiction, and Ripple wants to be at the center of that transformation.
Final Thoughts
Ripple’s launch of a Permissioned DEX on the XRP Ledger is a big step toward making decentralized finance work for traditional financial institutions. By creating a setup that adheres to strict rules while maintaining the speed and low costs of blockchain, Ripple is helping to bridge the gap between banks and DeFi. With features like sidechains, allowlists, and support for well-known assets like XRP and stablecoins, the platform offers both control and flexibility. This move shows Ripple’s clear goal: to lead the way in making DeFi safe, sound, and ready for the real world.
