- With XLS-80, XRPL adds a new way to control access on-chain. Businesses, issuers, and financial institutions get to set rules for financial activities.
- With XLS-80, financial institutions can set up controlled spaces where only verified users get access to certain parts of XRPL.
The XRP Ledger (XRPL) is rolling out a compliance-focused upgrade called Permissioned Domains (XLS-80). The update aims to boost security, push institutional adoption, and bring blockchain transactions in line with regulatory rules. With XLS-80, financial institutions can set up controlled spaces where only verified users get access to certain parts of XRPL.
The update will help institutions follow Know Your Customer (KYC) and Anti-Money Laundering (AML) rules without using third parties. By adding rules directly to the blockchain, businesses can decide who can participate in deals, creating a trustworthy and transparent framework. Financial companies can integrate decentralized finance (DeFi) solutions while maintaining regulatory compliance.
Institutional Control Meets Blockchain Transparency
With XLS-80, XRPL adds a new way to control access on-chain. Businesses, issuers, and financial institutions get to set rules for financial activities. Instead of a system open to anyone, institutions create credential-based areas where only approved participants can do certain transactions.
A Domain object is key to this process. It defines the credentials needed for entry. That way, institutions apply KYC and AML checks without extra steps. Traditional models rely on outside verification, but XRPL’s system only confirms if a credential is valid, not personal details. Privacy stays intact while institutions manage risks securely.
Permissioned Domains solve a major issue for financial institutions that avoid blockchain due to regulations. Enterprises gain a safe space to tokenize real-world assets (RWAs) and stablecoins. Only verified entities can access and trade in that controlled setting.
Permissioned DEX: Regulated Trading Without Private Blockchains
The Permissioned DEX is built directly on top of Permissioned Domains. That setup allows institutions to trade digital assets in a regulated way within XRPL’s existing decentralized exchange (DEX). Instead of running on private blockchains or using special permissioned tokens, regulated institutions can use XRPL’s DEX features while following compliance rules.
Users must have approved credentials to trade on the Permissioned DEX. This requirement ensures that only authorized participants can place orders in certain liquidity pools, improving security without sacrificing the main benefits of decentralization.
Institutions issuing tokenized real-world assets (RWAs) or stablecoins could set up private trading environments that comply with financial regulations. This could open up regulated secondary markets for tokenized assets, making XRPL more appealing to institutional investors.
How Credentials Power Permissioned Domains
For XLS-80 to function, users must first have the right credentials—a concept from XLS-70 that added identity management to XRPL. Credentials act as a pass, allowing only approved users to enter restricted parts of the ledger.
Each organization sets its own rules for credentials. That might include KYC-approved IDs from reliable issuers. Users who meet the conditions automatically become part of the permissioned system, making participation smooth and private.
Instead of making users store personal data on the blockchain, XRPL checks if credentials are valid but does not look at identity details. That creates a middle ground between security and privacy, making compliance-focused finance possible without exposing user information.
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