RedotPay’s XRP-backed Visa card is a margin loan wearing a stablecoin badge
RedotPay's new RLUSD card lets 8m users borrow against XRP at 50% loan-to-value, raising fresh questions on retail leverage risk.
A Hong Kong-founded payments fintech has launched a Visa-linked card that lets holders of Ripple’s XRP token borrow against their coins rather than sell them, reviving a long-standing debate in wealth management: whether collateralised lending against a volatile asset is a convenience for consumers or a transfer of risk dressed up as one.
RedotPay, which says it serves more than eight million users across upward of 100 countries with roughly $12 billion in annualised transaction volume, unveiled the RLUSD card this week. The product runs on the XRP Ledger and lets customers pledge XRP as collateral at a 50% loan-to-value ratio, drawing a credit line settled in Ripple’s RLUSD stablecoin that can then be spent anywhere Visa is accepted.
Spending without selling, borrowing without saying so
The commercial pitch is straightforward: holders keep their XRP exposure and any future upside, avoid a taxable disposal event, and still access spending power in everyday currency. That framing is accurate as far as it goes. But structurally, the arrangement is a securities-backed line of credit — the same instrument long used by private banks to lend against equity portfolios — applied here to a considerably more volatile token and distributed to a mass retail base rather than a wealth-management clientele.
Under a 50% loan-to-value structure, a customer pledging $1,000 of XRP receives $500 of spending power. That collateral cushion is designed to absorb price swings, but XRP has fallen roughly 60% over the past year, according to the underlying data reported alongside the launch. A sustained drawdown of that magnitude would test the mechanism RedotPay has built, specifically the point at which pledged collateral is liquidated to cover the outstanding credit line.
A genuine distribution win for RLUSD
Beyond the consumer-credit angle, the launch is a notable distribution event for Ripple’s stablecoin. Routing everyday consumer settlement through RLUSD on the XRP Ledger gives the token real-world transactional volume rather than purely speculative or institutional use, at a moment when stablecoin issuers are competing hard for payment-rail relevance.
RedotPay says its stablecoin card volume has risen 80% so far this year and 250% year over year, a trend the company is clearly seeking to build on with a product tailored to XRP’s large and loyal retail holder base. The commercial logic for RedotPay is also clear: card issuers earn on lending spreads and merchant interchange, and a collateralised credit product against a widely held token gives the company a new lever on both.
What has not been disclosed
What remains unpublished is arguably more consequential than what has been announced. RedotPay has not disclosed the borrowing costs attached to the credit line, the precise liquidation thresholds that would trigger a forced sale of pledged XRP, or how the system would behave during a rapid, deep drawdown of the kind XRP and other altcoins have experienced repeatedly over the past year.
Those terms, rather than initial adoption figures, will determine whether the product functions as intended or exposes retail borrowers to forced liquidations at the worst possible moment. For European and UK observers watching the broader push toward crypto-linked consumer credit, the RLUSD card is a useful test case for how collateralised digital-asset lending performs once markets turn, and for how clearly such products disclose their risks to retail users who may not immediately recognise a margin loan when it arrives wearing a payment card.
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