Ripple is building the “KYC-DEX” on XRP Ledger: Two order books, one market
- Ripple brings compliance directly to the XRP ledger with “Permissioned Domains”. For the first time, institutions could trade on a public DEX without taking on counterparty risk “blindly”.
- The potential game changer: separate matching worlds (“open” vs. “permissioned”) on the same XRPL DEX.
With the activation of Permissioned Domains on February 4, 2026, a feature went live on the XRP Ledger (XRPL) that is currently causing quite a bit of hype in the XRP community. And Ripple itself is of course also fueling the topic.
The idea is quickly explained: Permissioned domains are intended to give institutions access to decentralized exchanges (DEX). So not via any private side setups, not via off-chain constructs, but on the XRP Ledger.
Central to this is another XRPL amendment that has yet to go live. RippleX, the development arm of Ripple Inc., specifically refers to the Permissioned DEX (XLS-81). The necessary validator approval has been achieved. If the Supermajority holds, activation will follow on February 18th.
Ripple wrote about this on Wednesday via X:
“The full permissions structure to access compliant liquidity pools on XRPL will soon be available to institutions.”
Permissioned Domains are now live on XRPL Mainnet, and Permissioned DEX has achieved validator consensus to activate in 2 weeks!
Soon, the full „permissioning stack“ will be available for institutions to access compliant liquidity pools on XRPL.
Credentials: Verifiable… https://t.co/FDEOmsM5kQ
— RippleX (@RippleXDev) February 4, 2026
Why this could be a game-changer for Ripple and XRP
Permissioned domains are, at their core, an access layer. They define a controlled area in which it is determined what evidence an account must provide in order to be allowed to participate.
These proofs are called “credentials”. So verifiable attestation – about identity, compliance status, approval by jurisdiction, things like that. They are issued by “trusted parties”. Classic regulatory topics, just not outsourced to a closed platform, but depicted as a mechanic in the ledger.
Mayukha Vadari of RippleX-Entwickler describes it on X like this:
“Credentials are on-ledger receipts from a trusted issuer that confirm a user’s identity or status. Permissioned domains create a safe, secure environment in which only properly accredited participants can operate. The permissioned DEX allows institutions to trade securely within a permissioned domain on the DEX.”
It sounds dry, but it’s the point: Regulated players should be able to use the XRPL-DEX without immediately running afoul of their compliance requirements. And with that the discussion shifts. It’s no longer just about “DEX vs. CEX”. But about something else:
Can you split a public DEX so that certain order books are only used by verified participants – while the open market continues to run in parallel?
Domains are the basic requirement. Credentials are the “ID”, the access permission. Important: The order book matching logic is actually separated. Ripple explains it like this:
“An approved offer can only be matched with other valid approved offers. Open offers can be matched with other open offers, but not with permitted offers.”
In plain language this means: two separate execution worlds – on the same DEX. A regulated order book can therefore prevent orders from being placed against any unknown counterparty. The public DEX remains unaffected. Just separately.
This separation is practically a hard requirement for institutions. What matters is not who can read the ledger. But who ends up as the opposing party in the match.
Ripple names FX swaps, payouts (e.g. payroll/contractor), B2B cross-border transfers and treasury conversions as areas of application. So wherever a DEX setup would be attractive, but compliance is non-negotiable.
The thesis behind it: “Institutional DeFi” should no longer fail because of the technology. Permissioned domains are intended to set the framework. The Permissioned DEX is intended to create the platform on the XRP Ledger.
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