Flare Introduces XRP-Backed Stablecoin on Enosys Liquity V2

Flare Network has announced the launch of a stablecoin backed by XRP  (FXRP) that will run on Enosys Liquity V2, using the Wrapped Flare token (wFLR) as collateral.

Enosys Liquity is a self-running borrowing system that uses key Liquity features and Flare’s FTSO to get decentralised priced data. Previously, Liquity relied on Ethereum for collateral, but now uses XRP on Flare.

The upgrade,  already adopted by projects like Everything Blockchain for their crypto treasury, has made it easier to trade XRP and participate in DeFi applications such as lending, borrowing, and yield generation while still maintaining exposure to the underlying FXRP.

This is a transformative step for XRP, which, due to the XRP Ledger’s lack of native smart contract functionality, has historically been excluded from the broader DeFi ecosystem. 

Using features like Locked Assets Loans, Safety Funds, and Price Feeds, users can lock their XRP and mint a stablecoin. These systems work like a Collateralized Debt Position,  allowing holders to create or borrow a stablecoin and  move staked XRP(sXRP) and other tokenized assets to flare.

Flare’s XRP Stablecoin Unlocks Liquidity and Expands Adoption

According to Flare Network, investors don’t need to sell their XRP tokens for cash. Instead, they can unlock liquidity by issuing stablecoins and use them for payments, lending, trading, or earning interest.

Flare CEO Hugo Phillion added that investors can also use these stablecoins to purchase NFTs, which further increases their value in the digital economy.

Along with unlocking liquidity while still holding XRP for the long term, the system will also reward investors with extra Flare tokens (rFLR), thus encouraging more people to use it.

The launch comes amid the growing use of the XRP ledger as a system for handling stablecoin transactions. With over 7 million active accounts, this milestone highlights XRP’s expanding adoption.