Ripple USD Trading Gets a Boost as XRP Ledger’s ‘Clawback’ Goes Live

On Friday, the XRP Ledger introduced a significant update with the implementation of the “clawback” amendment, which passed with overwhelming support from validators, securing more than 90% approval. This new feature gives token issuers the ability to reclaim tokens from user wallets under certain conditions, such as compliance with regulatory requirements, fraud prevention, or retrieving tokens sent to unintended addresses.

The primary beneficiary of this update is Ripple’s dollar-pegged stablecoin, RLUSD, which now has the capability to be traded directly on the XRP Ledger’s decentralized exchange (DEX). This development is expected to increase liquidity and trading opportunities for RLUSD, likely driving growth in decentralized finance (DeFi) activity on the network.

Additionally, the amendment strengthens the regulatory compliance of XRP Ledger’s Automated Market Maker (AMM) pools, making it possible for tokens with clawback features to be used within these pools. The update also includes changes to the “AMMDeposit” transaction type, which now prevents frozen tokens from being deposited into the AMM.

XRP Ledger’s built-in DEX allows users to swap tokens without relying on traditional order books, instead utilizing liquidity pools facilitated by AMMs. The launch of AMM functionality in March 2024 with the XLS-30D amendment has been a success, with the DEX processing over $1 billion in swap volumes. January proved to be a strong month, as more than $400 million in trades were processed.