Ripple, BNY explore using the XRP Ledger to finance approved invoices

Ripple and BNY Test Invoice Financing on the XRP Ledger

Ripple and BNY Mellon are collaborating on a proof‑of‑concept that uses the XRP Ledger (XRPL) to settle approved invoices. The pilot adds XRP and Ripple’s stablecoin RLUSD to BNY’s custody platform, allowing corporate clients to finance invoices more quickly and with lower transaction costs.

Why the XRP Ledger?

The XRPL is a public, permissioned‑compatible blockchain that offers near‑instant finality and sub‑second settlement. Its native token, XRP, provides liquidity for cross‑border and domestic payments, while RLUSD—a fully collateralised stablecoin—offers a fiat‑pegged medium of exchange that can be moved without the volatility of other cryptocurrencies. By leveraging these assets, BNY aims to reduce the time it takes for an approved invoice to be funded and settled, moving from days to minutes.

How the Pilot Works

1. Invoice Approval: A supplier submits an invoice to a corporate buyer. Once the buyer approves the invoice, the details are recorded on the XRPL.
2. Funding Request: The supplier can request financing. BNY, acting as a custodian, makes XRP or RLUSD available to the supplier’s wallet on the ledger.
3. Settlement: Upon acceptance, the XRPL processes the transfer instantly, and the supplier receives the funds. The buyer’s account is debited in the same transaction, ensuring atomic settlement.
4. Reconciliation: All transaction data is immutable on the ledger, simplifying audit and compliance processes for both BNY and its corporate clients.

The pilot also integrates C2FO’s invoice‑financing marketplace, allowing suppliers to choose between traditional financing and the XRPL‑based option. This creates a competitive environment that could drive down financing costs.

Potential Benefits for Participants

• Speed: Settlement occurs in seconds, eliminating the typical 2‑5 day lag associated with traditional banking wires.
• Cost Efficiency: Lower transaction fees compared with legacy correspondent banking networks.
• Transparency: An immutable ledger provides a clear audit trail, reducing reconciliation effort.
• Liquidity Management: XRP’s high liquidity and RLUSD’s stable value give corporates flexible options for working‑capital management.

Challenges and Considerations

• Regulatory Oversight: Both BNY and Ripple must ensure that the use of digital assets complies with U.S. securities and AML regulations.
• Custody Integration: Adding XRP and RLUSD to BNY’s existing custody infrastructure requires robust security protocols and risk management.
• Adoption Curve: Corporate finance teams need education on blockchain‑based settlement to feel comfortable moving away from familiar processes.

Looking Ahead

If the pilot demonstrates reliable performance and regulatory compliance, BNY could roll the solution out to a broader client base, potentially expanding to other use cases such as trade finance and cross‑border payments. Ripple, for its part, gains a high‑profile institutional partner that validates the XRPL’s utility beyond retail or speculative use.

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The collaboration underscores a growing trend of traditional financial institutions experimenting with public‑ledger technology to modernise core processes. While still in the testing phase, the Ripple‑BNY partnership could signal a shift toward faster, more transparent invoice financing solutions.