Arf and Ripple have joined forces to supply licensed international payment firms with RLUSD-based settlement liquidity on the XRP Ledger. This deal focuses on providing short-term working capital for ongoing payment operations.
Partnership Overview
In the initial stage, Arf will offer direct RLUSD settlement liquidity on the blockchain. This allows payment companies to secure funding while they wait for cross-border transactions to finalize. Usually, this liquidity is repaid within a period of one to five days, which enables the capital to be recycled across different payment flows.
This initiative tackles a persistent problem in global payments. Businesses managing card, remittance, and other transaction types often need to pre-fund activities in various markets. This process ties up working capital before the actual settlement occurs.
Standard financing avenues do not always suit this requirement. Securing bank credit lines can take months and frequently demands collateral that must remain in a single location. Conversely, payment firms require liquidity that can shift between markets in response to changing transaction demand.
Operational Challenges Addressed
Headquartered in Zug, Switzerland, Arf has expanded to handle approximately USD $10 billion in annual global settlement volume since its launch in late 2022. The firm’s capital turns over on a monthly basis, specifically four times.
The company situates itself within the emerging PayFi sector, or payment finance. This sector applies financing, treasury management, and related financial products to real-time payment flows. In this context, the emphasis is on settlement liquidity, which Arf and Ripple are introducing to the XRP Ledger via RLUSD.
RLUSD serves as Ripple’s dollar stablecoin, while the XRP Ledger acts as the public blockchain of that ecosystem. Ripple stated that the partnership combines a regulated token backed by the dollar, a settlement network, and a specialist provider of short-term payment finance.
Arf functions as a Swiss-regulated financial institution and maintains membership in VQF. Its framework integrates fiat and stablecoin treasury management with on-chain infrastructure designed for payment activities.
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Ali Erhat Nalbant, Co-founder and Chief Executive Officer at Arf, discussed the funding shortage payment companies encounter while awaiting settlement.
“Payment companies need capital to keep money moving while they wait for funds to settle. We’re meeting that need at scale, with $10 billion in annual settlement volume and capital turning over four times a month. Through this partnership with Ripple, we’re bringing stablecoin working capital to the XRP Ledger to help payment companies bridge that gap and support more payment volume,” said Ali Erhat Nalbant, Co-founder and Chief Executive Officer at Arf.
Ripple noted that this arrangement demonstrates a practical application for both the XRP Ledger and RLUSD, especially in cross-border payments. In this sector, the timing of liquidity is often just as critical as the total amount of capital available.
Future Developments
“Settlement liquidity is exactly the kind of use case the XRP Ledger and RLUSD are built to support. Payment companies need fast access to capital across borders, without tying up significant amounts of liquidity. The XRP Ledger provides fast, efficient settlement, while RLUSD provides a regulated dollar stablecoin. Arf brings deep experience in PayFi, helping companies access short-term capital to keep payments moving while they wait for funds to settle,” said Jasmine Cooper, Head of Product for RippleX at Ripple.
The organizations also mentioned a subsequent phase involving the creation of native lending infrastructure on the XRP Ledger. Once this infrastructure is ready, Arf plans to transfer a larger portion of its settlement liquidity activity directly onto the protocol.
This change would enable Arf to oversee the capital used for this type of liquidity on-chain and distribute it using native lending functions. However, underwriting and working capital decisions will continue to be handled off-chain by Arf.
This partnership occurs as stablecoins and blockchain-based payment systems search for commercial applications outside of trading markets. Cross-border payments have become a significant area of interest because the industry relies heavily on liquidity management, foreign exchange, and settlement timing across different jurisdictions.
For payment companies, the primary concern is not merely having access to capital in total, but ensuring that funds are available in the correct market at the appropriate moment. Arf’s model is engineered to meet this operational need, utilizing short-duration funding that aligns with the settlement cycle of actual payment transactions.
