XRP Ledger adds delegated permissions for institutions

The PermissionDelegationV1_1 amendment went live at ledger 107,524,865. It allows account owners to assign specific transaction permissions to other accounts while retaining control of the main account.

A stablecoin issuer could authorize a compliance account to approve counterparties and give a separate account permission to execute payments. Owners can modify or revoke those permissions without using their primary signing keys for routine operations.

The framework divides account responsibilities in a way similar to traditional finance, where treasury, compliance and asset management teams may have separate authorities. Vet, a contributor to the XRP Ledger Foundation, described the feature as a way for asset issuers and treasuries to manage account duties while protecting their primary keys.

PermissionDelegationV1_1 does not support custom spending limits or restrictions based on specific assets. XRPL developers have warned users not to delegate the PaymentBurn permission until the fixCleanup3_4_0 amendment becomes active. A flaw could allow authorized accounts to mint issued tokens in certain circumstances.

The upgrade comes as tokenized asset activity on XRPL grows. An Oct. 7 snapshot recorded about $3.7 billion in year-to-date growth in XRPL’s tokenized asset value, excluding stablecoins. The comparable figures were about $3.5 billion for BNB Chain, $2.8 billion for Stellar and $2.2 billion for Solana.

Data published Oct. 9 listed about $4.54 billion in represented real-world assets on XRPL and $499 million in distributed assets, excluding stablecoins. Represented assets are recorded on a blockchain while remaining on the issuer’s platform. Distributed assets can move between holders outside that platform, including through permissioned transfers.

In July, Aviva Investors launched a tokenized share class of its US Dollar Liquidity Fund on XRPL after receiving approval from the Central Bank of Ireland. Komainu acted as institutional custodian, Licuido supplied tokenization infrastructure and BNY Mellon held the fund’s underlying assets. Ripple later announced investments in Licuido and transfer-agent technology provider ZILO.

Permission Delegation is one of five capabilities that RippleX has outlined for tokenized asset transactions outside conventional banking hours. The others are Atomic Batch, Confidential Transfers, Dynamic Multi-Purpose Tokens and Sponsored Fees.

Atomic Batch activated on Oct. 9 at ledger 107,540,993. Its all-or-nothing mode links transactions so they either all succeed or all revert. RippleX has described the feature alongside Permission Delegation in a proposed system for settling collateral and payments outside banking hours.

Confidential Transfers would conceal transfer amounts while allowing selected parties, including auditors and regulators, to access the information. Dynamic Multi-Purpose Tokens would let issuers update designated token properties. Sponsored Fees would allow third parties to pay transaction charges and account reserves for institutions that cannot hold XRP directly.

Permission Delegation and Atomic Batch are live. ConfidentialTransfer, DynamicMPT and Sponsor are awaiting validator approval.