Ripple wants to add lending to XRPL for institutions that hold tokenized assets. The proposal would let them borrow against those assets on the ledger, while the actual credit call stays off-chain with the lender.
One standard would create single-asset vaults on XRPL. Another would handle the loan itself on-chain: terms, interest, repayments, and what happens if a borrower defaults.
That matters because Ripple is trying to push XRPL beyond payments and issuance into a market where tokenized assets can also be used as collateral. But this is not open retail DeFi. Institutions could manage the borrower review themselves, then use XRPL to track and service the loan.
It also is not live yet. Validators still have to approve it.