Switzerland-based Arf will supply short-duration working capital in RLUSD, a regulated US dollar stablecoin, to licensed payment, credit card, and remittance companies on the XRP Ledger (XRPL). The capital pre-funds cross-border transactions and is repaid as those payments settle. Under the agreement with Ripple, the company plans to route part of this activity through XRPL’s native lending functionality once that infrastructure becomes available.
The working capital gap in cross-border payments
Licensed firms that move funds across borders must hold working capital in multiple markets so they can pre-fund payment flows while they wait for settlement. According to the companies, the issue is not only whether a firm has capital overall. It is whether the capital is in the right market at the right time.
Traditional financing has not always matched the speed of modern payment flows. Bank credit lines can take months to establish and generally require substantial collateral. That ties capital to a single location, which suits payment companies poorly because their liquidity needs to move between markets.
PayFi and Arf’s operating model
Arf operates in payment finance, or PayFi, a category that builds treasury, FX, custody, and investment products around real-time payment flows and the time value of money. PayFi covers settlement liquidity, receivables financing, and treasury management across fiat and stablecoins. Arf and Huma Finance were early developers of the category. At the same time, Arf provides the regulated infrastructure, and Huma converts that regulated activity into onchain yield assets. The companies identify settlement liquidity as PayFi’s main use case at present.
Ali Erhat Nalbant, Co-founder and CEO at Arf, said the partnership brings stablecoin working capital to the XRPL to help payment firms cover the gap before funds settle and to support higher payment volumes. In addition, Jasmine Cooper, Head of Product for RippleX at Ripple, described settlement liquidity as the type of use case XRPL and RLUSD were designed for. In that view, the ledger provides fast settlement, and RLUSD provides a regulated dollar stablecoin.
Phased rollout and native lending
In the first phase, Arf will provide RLUSD settlement liquidity directly on the XRPL. This liquidity is typically repaid within one to five days as cross-border payments settle, so the same capital can be redeployed repeatedly against payment flows.
Once XRPL’s native lending infrastructure goes live, Arf intends to move more of its settlement liquidity activity onto the protocol. Under this model, the capital behind the liquidity would be managed onchain and deployed through native lending functionality. Arf would continue to make underwriting and working capital decisions offchain.
The arrangement links onchain lending to volumes from traditional payment companies rather than to activity that originates on the blockchain. For the XRPL, it adds a PayFi use case built around licensed payment firms. Moreover, for those firms, it offers short-duration working capital that can move across markets as an alternative to collateral-heavy bank credit lines.
