A new privacy feature on the XRP Ledger is moving to the voting stage, giving validators the chance to decide whether institutions can make certain asset transfers without publicly revealing transaction amounts.
The proposal, called Confidential Transfers, was included in XRP Ledger version 3.3.0, which was released on August 6. However, the feature is not active yet and must first receive approval from network validators.
If approved, Confidential Transfers would allow users to hide balances and payment amounts linked to Multi-Purpose Tokens (MPTs), which are commonly used for tokenized assets such as funds, bonds, and other financial products.
While transaction amounts would be hidden, some information would remain public. The sending and receiving accounts, along with the type of asset being transferred, would still be visible on the blockchain.
The goal is to provide greater privacy for institutions that want to move tokenized assets on a public ledger without exposing sensitive financial details.
The proposal comes as the XRP Ledger’s tokenized asset market continues to grow. According to industry data, the network currently hosts around $1.38 billion in distributed real-world assets. Ripple’s RLUSD stablecoin makes up about $845.7 million of that total, leaving more than $530 million in other tokenized assets that could potentially benefit from the new privacy feature.
Several major issuers already operate on the network, including Ondo Finance, VERT Capital, Archax, and Societe Generale. Recent launches also show increasing institutional interest in using the XRP Ledger for tokenized financial products.
At launch, however, Confidential Transfers would have limitations. The feature would only work for direct MPT transfers between accounts. It would not initially support transactions through the XRP Ledger’s built-in decentralized exchange, nor would it work with escrow services or checks.
The latest software update also introduced several other proposed upgrades. These include the ability to bundle multiple transactions together, allow one account to pay fees on behalf of another, delegate certain account permissions, and modify some token features after issuance.
The privacy feature could be useful for institutional transactions involving tokenized securities. Earlier this year, companies including JPMorgan, Mastercard, Ripple, and Ondo tested the settlement of a tokenized U.S. Treasury fund using the XRP Ledger, highlighting the growing role of blockchain technology in traditional finance.
Before any of these changes become active, they must be approved by the network. XRP Ledger rules require at least 80% of trusted validators to support an amendment for two consecutive weeks before it can be activated.
The next key step will be the validator vote, which will determine whether Confidential Transfers becomes part of the XRP Ledger and whether institutions choose to adopt the feature for future tokenized asset transfers.
