A new potential collaboration between Ripple and Ondo Finance has been highlighted by cryptocurrency analyst Paul Barron, indicating that an announcement could be imminent. This partnership may enable the introduction of institutional yield products on the XRP Ledger (XRPL).
Barron points out that Ripple has been proactively promoting its RLUSD stablecoin alongside its institutional custody solution from Metaco. Given this momentum, the upcoming Ondo Summit presents an ideal opportunity for an official announcement regarding the integration.
The RLUSD is positioned as a competitor to established stablecoins like USDC and USDT, but it requires a robust use case to drive adoption. According to Barron, Ondo”s yield-generating product, USDY, could fulfill this need. He envisions a scenario where USDY serves as the primary yield-generating asset for RLUSD on XRPL, allowing users to hold RLUSD for transactions and seamlessly convert it to USDY to earn yield.
This potential collaboration aligns the interests of both companies, as Ripple seeks to find use cases within the decentralized finance (DeFi) sector, while Ondo aims to broaden its distribution network.
The acquisition of Metaco by Ripple adds another layer to this partnership. Metaco is known for providing high-end institutional custody solutions utilized by major banks such as BBVA and HSBC. Barron emphasizes that Ondo”s decision to hold a portion of its tokenized funds” underlying assets through Ripple Custody will reinforce a “bridge of trust” among banking institutions, enhancing the credibility of Ondo”s assets.
Additionally, Ondo”s existing operations across ecosystems like Ethereum, Solana, and Mantle make the transition to XRPL a logical progression to tap into Ripple”s extensive institutional network. The native accessibility of OUSG (US Treasury bonds) and USDY on XRPL could be particularly noteworthy.
Barron suggests that a transformative application could emerge, enabling the instant minting and redemption of Ondo Treasury products around the clock using XRP or RLUSD. This capability could address the traditional finance industry”s often-criticized T+2 settlement issue, showcasing XRPL”s speed advantage for real-world asset transactions.
In the context of Ripple”s core business in cross-border payments, Barron highlights the significant amount of idle capital held by banks that fails to generate returns. His proposal involves the integration of Ondo”s yield products into RippleNet, directing banks” unused balances towards Ondo”s OUSG products, potentially yielding an annual return in the range of 4-5%.
