As of October 1, FXRP on Ethereum Morpho's collateralized lending market has about 7.18 million RLUSD in outstanding debt. Approximately 10.76 million FXRP have been minted as collateral.
Looks okay? Don't rush.
These three addresses account for 93% of the total debt.
Yes, you read that right. The entire "XRP on-chain credit market" is basically dominated by three whales.
Meanwhile, Ripple President Monica Long said something in Seoul that set the community on fire—
"Credit-related pilots are underway, aiming to activate next year. Allowing XRP to be deposited into lending protocol liquidity pools as collateral to fund customers' payment obligations."
The co-founder of Flare has an even more ambitious goal: to attract 5 billion XRP into the ecosystem within six months.
7.18 million vs 5 billion vs 57 billion.
This is the whole truth of the XRP credit narrative—from 0 to 1 has already happened, but the road from 1 to 100 is much longer than you think.
🔍 First, understand one thing: what's wrong with XRP?
XRP was designed as a "bridge asset" for cross-border payments.
Bank A exchanges dollars for XRP, XRP crosses the Ripple network in seconds, and Bank B on the other end exchanges it for yen.
During the entire process, XRP is held for 3 to 5 seconds.
This is the so-called "speed issue."
Does the Ripple network process tens of billions of dollars in payments daily? It has nothing to do with the XRP coin price. Money flows, but the token is just "passing through"; no one really needs to hold it.
Trader Peter Brandt therefore called it a "fool coin."
The data is even more painful: according to the utility valuation model, if XRP is used only as a bridge asset, its pure utility value is about $0.0002.
At the current price of $1.50, the vast majority is speculative premium, not real holding demand generated by payment business.
What's more troublesome is that Ripple's own stablecoin RLUSD is also diverting XRP's bridge function. Banks can settle with RLUSD, which has almost zero volatility, so why use XRP, whose price fluctuates wildly?
The result is: Ripple signs more and more banks, payment volume keeps growing, but XRP has fallen from $3.65 in July 2025 to about $1.50 now, a drop of over 60%.
Business is growing, coin price is falling. There's a missing mandatory transmission link in between.
💊 Why might the credit model be different?
The credit model described by Monica Long in Seoul has a fundamental difference from all previous XRP use cases:
It requires XRP to be locked.
In the bridge model, XRP is held for a few seconds and then released. In the credit collateral model, XRP is deposited into lending protocol liquidity pools as collateral, locked for a period, used to provide short-term financing for customers' payment obligations.
To put it simply:
XRP in the bridge model is like change at a highway toll booth—just passing through.
XRP in the credit model is like reserves in a bank vault—must stay there continuously for the business to operate.
Locking means slower speed. Slower speed means more XRP needs to be held in the system. If institutions need to continuously hold large amounts of XRP as collateral reserves to participate in credit business, demand shifts from "instantaneous circulation" to "continuous inventory."
This is the first time in XRP's history that a business design might pull the speed variable from a very high value down to a medium-low value. According to the utility valuation formula (price = transaction volume / circulation × speed), the same transaction volume can support a higher token price.
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