Arf and Ripple Partner to Bring Settlement Liquidity to the XRP Ledger.
Arf is bringing RLUSD-powered settlement liquidity to licensed cross-border payment companies on the XRP Ledger (XRPL). Arf helped pioneer PayFi (payment finance) and has scaled to around $10 billion annually in global settlement volumes. As XRPL's native lending infrastructure comes online, it will become part of that settlement liquidity.
Cross-border payments move trillions of dollars every year, but the licensed companies moving that money face a fundamental challenge: working capital – specifically, settlement liquidity. Payment, credit card and remittance companies processing billions in transactions need significant amounts of working capital available across markets to pre-fund payment flows. Payment companies need that working capital available to fund transactions while they wait for payments to settle.
Traditional financing does not always match the speed of modern payments. Bank credit lines can take months to establish and typically require significant collateral — a poor fit for global payment companies, whose capital needs to move across markets rather than sit pledged in one. And for global payments, it is not whether you have the working capital or not in general, but where and when you have it.
What is PayFi?
PayFi, or payment finance, rethinks financial products through a payments lens, building treasury, FX, custody and investment products around real-time payment flows and the time value of money. It spans areas including settlement liquidity, receivables financing and treasury management between fiat and stablecoins. Arf and Huma Finance pioneered the category, with Arf providing the regulated infrastructure for PayFi and Huma transforming that regulated activity into one of the fastest-growing yield assets onchain.
For the public blockchain, XRPL, the focus is settlement liquidity, PayFi’s largest use case today. Arf and Ripple are bringing Arf’s settlement liquidity to XRPL, using RLUSD to provide short-duration working capital that is deployed and repaid as cross-border payments settle.
Since launching in November 2022, Arf has scaled to $10 billion annually in global settlement volumes, with capital turning over 4x monthly. Headquartered in Zug, Switzerland, Arf is a Swiss-regulated financial institution and member of VQF, combining the fiat and stablecoin treasury management infrastructure of a regulated financial institution with Web3-native capabilities. Arf sits between both worlds: a regulated institution operating natively onchain, powered by real payment volume from traditional payment companies.
“Payment companies need capital to keep money moving while they wait for funds to settle. We’re meeting that need at scale, with $10 billion in annual settlement volume and capital turning over four times a month. Through this partnership with Ripple, we’re bringing stablecoin working capital to the XRP Ledger to help payment companies bridge that gap and support more payment volume.”– Ali Erhat Nalbant, Co-founder and CEO at Arf
“Settlement liquidity is exactly the kind of use case XRPL and RLUSD are built to support. Payment companies need fast access to capital across borders, without tying up significant amounts of liquidity. XRPL provides fast, efficient settlement, while RLUSD provides a regulated dollar stablecoin. Arf brings deep experience in PayFi, helping companies access short-term capital to keep payments moving while they wait for funds to settle.”– Jasmine Cooper, Head of Product for RippleX at Ripple
As the first phase of the partnership, Arf will provide direct RLUSD settlement liquidity on the XRP Ledger. Arf’s short-duration settlement liquidity is typically repaid within one to five days as cross-border payments settle, allowing capital to be repeatedly deployed against real payment flows.
Native Lending on the XRPL
Once XRPL’s native lending infrastructure becomes available, Arf plans to bring more of its settlement liquidity activity directly onto the protocol. That means the capital supporting this liquidity can be managed onchain and deployed through native lending functionality, while Arf continues to handle underwriting and working capital decisions offchain.
