The price of Ripple (XRP) surged nearly 20% in a single day. According to overseas crypto media outlet CoinGape, XRP's price jumped sharply as the XRP Ledger (XRPL) moved one step closer to introducing institutional lending capabilities through a newly proposed lending protocol.

■ Institutional Lending Infrastructure Built by Ripple, Clearpool, and Cicada Partners

CoinGape reported that Ripple, Clearpool, and Cicada Partners recently began building the related lending infrastructure. Under the initiative, new lending is set to take place on the XRPL based on RLUSD.

■ Reasons Behind the Rally: Bitcoin Breaking $78,000, the CLARITY Act, and Treasury Debt Buybacks

According to CoinGape, the broader cryptocurrency market maintained a strong upward trend during Ripple's rally, with Bitcoin leading the surge by breaking through the $78,000 mark.

CoinGape reported that XRP's rise coincided with the moment when U.S. President Donald Trump urged Congress to approve the 'CLARITY Act' at a White House event attended by cryptocurrency and financial industry figures. The bill aims to make regulation in the United States more transparent.

CoinGape also explained that the crypto market reacted to moves by the U.S. Treasury regarding government debt. The Treasury announced plans to double the scale of debt repurchases to speed up the buyback process. According to CoinGape, this move further bolstered investors' buying sentiment and added momentum to the crypto market rally.

■ How the XRPL Lending Protocol Works

CoinGape cited another positive factor for XRP: proposed improvements to lending functionality on the XRPL are drawing attention from the institutional finance industry. According to CoinGape, Clearpool is building a lending platform in the form of a 'Lending Protocol' and 'Single Asset Vault.' Clearpool has facilitated more than $930 million in institutional loans since 2021.

CoinGape reported that the system is designed so that independent lending managers can create separate lending markets, with each manager able to set their own risk conditions per market.

Cicada Partners will handle lending-related operations. According to CoinGape, Cicada Partners will participate in borrower evaluation, loan execution, and loan management. The company has experience underwriting more than $860 million in loans and plans to closely monitor borrowers and their terms even after loans are issued.

■ Ripple's Role and How RLUSD Will Be Used

CoinGape reported that Ripple will participate as a limited partner alongside other institutional investors, but will not take on any separate special support role. The fund will focus on fintech companies, payment service providers, and cryptocurrency firms that use stablecoins to raise operating capital. The asset used for lending will be RLUSD.

According to CoinGape, access and asset management functions can be provided using XRPL's Permissioned Domains, Credentials, and Clawback features.

■ "XRP Itself Is Not the Lending Asset"... User Debate Heats Up

However, XRP itself will not be used as the lending asset. CoinGape reported that because of this, online discussions are heating up as some users voice concerns that XRP's scope of use could be reduced.

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