Ripple has introduced a new permissioned decentralised exchange (DEX) on the XRP Ledger, marking a key shift in how regulated institutions can engage with decentralised finance.
Designed specifically for financial entities like banks, payment processors, and fintech firms, the platform ensures Know Your Customer (KYC) compliance and adherence to regulatory requirements—something that has historically kept these institutions from fully embracing DeFi.
This development coincides with the release of rippled v2.5.0, a significant upgrade to the XRP Ledger, adding features such as TokenEscrow, batch payments, and permission delegation.
These upgrades enable secure and scalable access for institutional players who need to trade digital assets in line with global financial regulations.
XRP Ledger update includes native support for institutional use
The new version of the XRP Ledger integrates functionality crucial to institutional operations.
With TokenEscrow, organisations can lock up assets for time-based releases.
The batch payments function simplifies large-scale transactions, and permission delegation lets administrators assign access controls without relying on external smart contracts.
These features allow institutions to operate within decentralised ecosystems without compromising on security or compliance.
By embedding these controls natively into the protocol, Ripple reduces reliance on third-party smart contracts, which can introduce risks and vulnerabilities.
The permissioned DEX zones are verified using XRP Ledger credentials, creating a closed-loop trading environment.
This means that while the DEX benefits from the transparency and speed of blockchain, only vetted participants can interact with its trading pairs, ensuring a compliant and auditable process.
Bridging DeFi with traditional finance frameworks
Ripple’s initiative responds to long-standing concerns among financial institutions about the opaque nature of DeFi platforms.
Most decentralised exchanges operate in open, permissionless environments, raising red flags for risk and compliance departments.
The new DEX from Ripple provides a solution that blends decentralised infrastructure with institutional oversight.
By creating a permissioned layer on the public XRP Ledger, Ripple allows traditional financial institutions to use the network without compromising regulatory mandates.
The ledger’s design already prioritises speed and low transaction costs, and this upgrade positions it to support a broader range of use cases in the enterprise sector.
This also means that institutions do not have to build private blockchains or resort to custom, off-chain compliance mechanisms.
Everything is built into the ledger’s core architecture, reducing implementation complexity and streamlining integration.
Ripple’s strategy to expand institutional blockchain adoption
The permissioned DEX is a strategic piece of Ripple’s long-term plan to make blockchain technology a standard component in institutional finance.
While Ripple has focused historically on cross-border payments through its On-Demand Liquidity (ODL) product, this move indicates an expansion into trading infrastructure that supports compliance-first DeFi use.
Ripple stated that the DEX is open to banks, payment providers, and fintechs that require controlled trading environments.
The aim is to provide tools that meet compliance needs while unlocking the efficiency and programmability of blockchain.
The timing aligns with broader market trends. Global regulators have increasingly signalled support for digital asset adoption—if frameworks are respected.
Ripple appears to be betting that institutions are now ready to engage more deeply with DeFi, provided the right safeguards are in place.
On 5 June, Ripple confirmed the launch via its official channels and community discussions.
Developers on X (formerly Twitter) have pointed out that the DEX eliminates the need for custom coding by using native protocol features.
Others highlighted how the rippled v2.5.0 release allows institutions to build DeFi products within legal and operational limits.
This release not only reflects Ripple’s ambition to dominate regulated blockchain services but also signals a broader industry shift.
More institutional-grade blockchain infrastructure is likely to follow as the market matures.
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