21Shares has identified a specific gap in the XRP demand story. Crypto researcher SMQKE (@SMQKEDQG) shared the firm’s analysis, highlighting what the report calls the missing piece: XRP as collateral. Infrastructure readiness is improving. Regulatory clarity is moving in the right direction. Neither, however, directly drives demand for XRP itself.
The firm points to the XLS-65/66 proposal as a meaningful development. It would allow tokenized assets to serve as loan collateral on the XRP Ledger.
The catch is that loans under this structure can be denominated in RLUSD or tokenized Treasuries rather than XRP. The proposal advances the ecosystem. It does not require XRP to be held or used as margin.
‼️THE MISSING PIECE IS XRP AS COLLATERAL‼️
“The catalyst that would directly amplify XRP demand is regulated institutions accepting XRP itself as collateral or margin.”✅
“That has not yet happened.”😶🌫️
A catalyst unlike any other💯
Documented.📝👇 pic.twitter.com/DL6Ve0uPFw
— SMQKE (@SMQKEDQG) October 12, 2026
The Catalyst That Changes Everything
21Shares is precise about what would actually move the needle. “The catalyst that would directly amplify XRP demand is regulated institutions accepting XRP itself as collateral or margin.” That has not happened yet.
The XRP Ledger already positions XRP as the bridge asset between traditional finance and decentralized finance. The 21Shares report shows this clearly. On the TradFi side: treasury management, cross-border payments, collateral, lending, and liquidity management. On the DeFi side: stablecoins, real-world assets, reserve currency, decentralized exchanges, and lending protocols. XRP sits at the center of all of it.
Collateral is highlighted in that diagram. It is one of the primary use cases listed under traditional finance. The infrastructure to support it exists. Regulated institutions have not yet adopted XRP in that role.
Supply Absorption Tells Its Own Story
On the supply side, the numbers are worth examining. US spot XRP exchange-traded products absorbed just 14.8% of the increase in circulating supply in H1 2026. ETPs were net sellers in two of six months during that period.
May was the standout exception. ETF absorption covered more than half of new supply that month, the strongest month on record. At the current annual run rate of $588 million, ETPs absorb roughly one-seventh of annual net XRP supply. That is a meaningful figure, but it also shows how much room remains for demand to scale.
What Institutional Adoption Would Require
For XRP to function as collateral in regulated environments, institutions need legal clarity, custody infrastructure, and internal risk frameworks that support a digital asset in that role. Each of those conditions is getting closer.
SMQKE called it “a catalyst unlike any other.” XRP’s role in payments and tokenization is already established. The next step, institutions holding XRP as margin or collateral, is the development that has not yet materialized.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
Follow us on X, Facebook, Telegram, and Google News
