Ripple Introduces Permissioned DEX on XRP Ledger to Attract Institutional Players Amid Low DeFi Activity

Ripple has rolled out a permissioned decentralized exchange (DEX) on the XRP Ledger (XRPL), marking a strategic move aimed at making decentralized finance (DeFi) more accessible and compliant for regulated institutions. The initiative has already gained strong support from Japan’s SBI Group CEO Yoshitaka Kitao, a long-time advocate for XRP, especially within the Japanese financial sector.

This newly launched feature is designed to allow banks, fintechs, and other institutions to interact with decentralized markets while meeting regulatory requirements such as Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance — elements that have long limited institutional involvement in DeFi.

What Sets Ripple’s Permissioned DEX Apart?

While the original XRPL DEX allowed open participation for any user, the permissioned DEX introduces controlled domains. These domains are reserved for accounts with verifiable credentials, enabling institutions to create private trading environments without needing custom smart contracts or splitting liquidity across different platforms.

Each DEX operates within its own “permissioned domain” and features isolated order books. This ensures that only verified participants can engage in transactions within these ecosystems. The system leverages emerging XRPL standards such as verifiable credentials and permissioned domains — both currently under review — to support these compliance-driven marketplaces.

“Institutional DeFi on the XRP Ledger is being built on compliance-first infrastructure,” Ripple stated. “The Permissioned DEX is a critical step toward enabling real-world utility while maintaining the openness and efficiency of blockchain.”

Use Cases Ripple Hopes to Unlock

Ripple envisions a range of applications for its new DEX infrastructure, including:

• Stablecoin and fiat currency swaps across jurisdictions
• Cross-border payroll solutions in local currencies
• B2B stablecoin payments and treasury management
• Corporate crypto-to-fiat conversions for international operations

These use cases align with Ripple’s longstanding focus on cross-border finance and its efforts to modernize global payment systems.

Institutional Readiness, But Where’s the Adoption?

Despite the innovation, adoption metrics remain underwhelming. As of now, the XRP Ledger DEX records less than $50,000 in daily trading volume, with a total value locked (TVL) under $60 million, according to DeFiLlama. In contrast, smaller Ethereum Layer-2 solutions like Base consistently process volumes in the millions.

The disparity raises important questions: Will compliance-focused infrastructure be enough to attract institutions? Can Ripple's DEX carve out a unique position in an already competitive and fragmented DeFi space?

Ripple remains optimistic. “A permissioned DEX solves the compliance barrier without sacrificing decentralization or efficiency,” the company said in its announcement.

Looking Ahead

Ripple’s Permissioned DEX reflects a broader trend toward merging the worlds of institutional finance and decentralized ecosystems. While uptake remains modest for now, the move signals a long-term bet on compliance as a gateway to mainstream adoption.

Brett Harrison, CEO of blockchain infrastructure firm Architect, summed it up aptly: “The next big wave in DeFi adoption will require us all to think proactively about regulation. Permissioned DeFi may be one answer — but it’s not the end of the story.”