In a recent tweet, RippleX engineer Antonio Kaplan highlights two necessities for regulated payments and FX on-chain, which are compliance and deep liquidity.
Kaplan noted that the upcoming XRP ledger feature Permissioned DEX set to launch on the mainnet in the next six days is expected to bring compliance and deep liquidity to the XRPL without fragmenting capital across private systems. The RippleX developer noted that this is a big step toward a true global settlement layer.
In a blog post written on behalf of RippleX developers, Kaplan noted that delivering an on-chain FX and settlement network with shared institutional liquidity, instant local payout and full policy control on the XRPL depends on a small set of core building blocks working together.
There are three building blocks in this category: first, Credentials (XLS-70), likened to a digital passport, are verifiable proofs of identity or compliance issued by trusted authorities.
Permissioned Domains (XLS-80) are likened to the visa process, while Permissioned DEXes (XLS-81) are likened to the transportation network.
Permissioned DEXes
Th permissioned DEX feature introduces a permissioned DEX system for the XRP Ledger. The amendment integrates permissioning features directly into the DEX protocol, allowing regulated financial institutions to be able to participate in the XRPL’s DEX while still adhering to their compliance requirements.
The permissioned DEX system will ultimately pave the way for broader institutional adoption of the XRP Ledger.
Regarding what happens to the open DEX, RippleX developer Antonio Kaplan stated that it is not going anywhere, as it will continue to function exactly as it does today, enabling anyone to place and fill offers. The Permissioned DEX will build alongside it, giving developers and institutions the option to create permissioned order books tied to verified credentials.
Kaplan noted that this remains the key to unlocking real-world financial flows, given that most regulated institutions cannot engage on open systems without counterparties being verified. By allowing credential-gated liquidity on the same ledger as open markets, XRP Ledger is expected to be a far more suitable option for institutional-grade payments, FX and settlement use cases.
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