- Ripple CEO Brad Garlinghouse emphasizes that privacy is crucial for institutional adoption of the XRP Ledger (XRPL), marking it as the next big focus post-compliance and tokenization.
- Recent upgrades to XRPL include features such as decentralized identifiers, on-chain credentials, permissioned domains, multipurpose tokens, and a hybrid decentralized exchange that together prepare XRPL for institutional use.
- Privacy is necessary for financial institutions to securely operate without exposing sensitive transaction details, transitioning from mere compliance to incorporating cryptographic confidentiality.
In a pivotal moment for the XRP ecosystem, Ripple’s CEO Brad Garlinghouse has reportedly confirmed that privacy is the critical next step to further institutional adoption of the XRP Ledger (XRPL). This insight was shared recently by an XRPL contributor known as “Vet,” who posted a photo of his conversation with Garlinghouse on X (formerly Twitter), underlining that while XRPL has already built many compliance and tokenization features, privacy remains the final frontier. The remark resonated deeply with the XRP community, especially because it complements the ledger’s existing upgrades: decentralized identifiers (DIDs), on-chain credentials, permissioned domains, multipurpose tokens, and a native decentralized exchange combining automated market maker (AMM) liquidity and order-book mechanisms. The revelation is more than symbolic — it suggests Ripple is preparing XRPL for a new institutional era, one where privacy, compliance, and scalability converge.
From Compliance to Tokenization
To understand why privacy matters now, it’s helpful to review how XRPL has evolved. Over the past several years, Ripple and the XRPL community have pushed forward features geared toward institutional readiness:
- Decentralized Identifiers & On-chain Credentials
XRPL supports DIDs and on-chain credentials that enable identity verification and attestations (e.g. proof of KYC status) in a permissioned way. These components reduce friction for regulated entities seeking to use XRPL without exposing sensitive identity data. - Multipurpose Tokens (MPTs)
The introduction of multipurpose token standards lets XRPL represent diverse real-world and financial assets natively. This paves the way for tokenization of assets—real estate, debt instruments, securities—on XRPL, giving it a richer financial plumbing than a pure payments chain. - Hybrid DEX: AMM + Order Book
XRPL’s native decentralized exchange combines both an AMM model and a central limit order book (CLOB), merging the benefits of liquidity pools with traditional order matching. This architecture makes trading and liquidity more efficient and flexible for institutional actors.
Together, these foundational pieces have brought XRPL close to institutional readiness. What’s missing is a privacy layer robust enough for financial institutions to operate confidently without leaking sensitive position or transaction details.
Garlinghouse and Vet
In his post, Vet recounts asking Garlinghouse: “What’s needed for more institutional adoption of XRP Ledger, so that banks and firms feel safe sharing transaction hashes?” His answer, as posted: “privacy.” This response may sound simple, but the implications are profound. It suggests that the leadership at Ripple views privacy not as an optional add-on, but as a necessary ingredient for XRPL’s institutional future. Many in the community had long viewed privacy as the last missing piece; Garlinghouse’s public confirmation makes it central to XRPL’s roadmap. In effect, this marks a shift from building features for compliance and tokenization, to bridging those features with cryptographic confidentiality. The question now is: How will XRPL implement privacy in a way that satisfies both institutional security and regulatory needs?
What Privacy Means for Institutions (Not Secrecy)
Before diving into technical possibilities, it’s important to clarify what “privacy” means in this context. It does not mean hiding everything from regulators or the public. Rather:
- Sensitive data (balances, transaction paths, counterparties) can be shielded from public view or competition.
- Institutions still retain the ability to prove compliance, KYC/AML status, and audit trails on-chain.
- The goal is selective disclosure: you reveal only what is necessary under controlled conditions, while keeping competitive insights confidential.
This approach appeals to regulated banks and financial firms, who often worry about exposing their proprietary positions, off-balance-sheet exposures, or trading strategies if moving into a transparent ledger environment.
XLS-66, ZK Proofs & Confidential Collateral
Ripple and XRPL developers have already mapped out a likely route to institutional-grade privacy, anchored around XLS-66 and zero-knowledge proofs (ZKPs).
XLS-66
Under XLS-66, institutions will gain the ability to borrow and lend using tokenized real-world assets (RWAs) as collateral. For example, a bank could issue a token representing a debt or mortgage, use it as collateral, and borrow funds within XRPL. The trick is enabling this in a way that hides private details without breaking compliance.
Zero-Knowledge Proofs (ZKPs)
ZKPs allow one party to prove a statement is true (e.g. “this wallet has at least $X,” or “these assets satisfy collateral requirements”) without revealing underlying data like exact balances or counterparty details. That cryptographic structure is key to privacy in public blockchains. The XRPL team intends to use ZKPs to mask balances and flows while still enabling compliance verification.
Confidential MPTs & Escrow / Contract Tools
To glue privacy, tokenization, and programmability, Ripple is developing confidential multipurpose tokens (MPTs) targeted for release in early 2026. These will let institutions manage private collateral across a range of asset classes. Complementing that are enhancements defined in XLS-100 and XLS-101, which govern smart escrows and smart contract capabilities. These tools can support conditional logic (e.g. collateral release, automated repayments) in privacy-aware deployments. Thus, privacy becomes the connective tissue between XRPL’s compliance/cardinality features and full institutional-grade finance.
Trillions of Institutional Assets on-Chain
Ayo Akinyele, Ripple’s Senior Director of Engineering, believes we are on the cusp of a wave: trillions of dollars in institutional assets may migrate onto blockchains over the coming decade — and privacy will be a gating factor in whether that shift happens. His team is building toward private collateral management at scale, with the upcoming confidential MPTs. If successful, institutions could tokenize and manage assets without fear of exposing their internal positions or strategies to competitors. In Akinyele’s view, privacy is an infrastructure requirement, not a luxury — analogous to how web applications require encryption for secure communications. Without a baseline of confidentiality, institutions are unlikely to commit large capital flows to public ledgers where every transaction is open.
Ripple’s CEO confirming privacy as the missing piece for institutional adoption of XRP Ledger marks a major turning point. The ledger has already built compliance enablers — DIDs, credentials, permissioned domains, tokenization standards, and a hybrid DEX — but privacy is what stands between promising infrastructure and full institutional trust. Through standards like XLS-66, ZK proofs, confidential multipurpose tokens, and enhanced smart escrows or contracts, XRPL is aiming to let institutions shield sensitive data while still proving regulatory compliance. If successful, it could unlock a flood of real-world asset flows onto a public ledger. That said, significant technical, regulatory, and adoption hurdles remain. Executing a privacy model that pleases regulators, scales efficiently, and wins institutional trust is no small feat. But Ripple’s public commitment — and community energy behind this vision — suggests they are pushing hard toward making XRPL a uniquely attractive blockchain for regulated finance.
Disclaimer: CryptopianNews shares this for learning and info only. It’s not meant to be financial or investment advice. Crypto markets change a lot and move quickly. Investing in them can be risky. You should always look into things yourself. Talk to a trained financial advisor before making any choices about investing.
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