XRP Ledger implements KYC/AML on-chain in a major update

On September 4, 2025, at 03:51:21 UTC, XRP Ledger (XRPL) activated its amendment “Credentials”, incorporating a layer of native identity aligned with standards to the base protocol and allowing KYC/AML-aware flows directly on-chain. This enhancement follows the XRPL amendment governance model, which requires an 80% supermajority of validators maintained for two weeks, culminating in an EnableAmendment event that permanently activates the new rules for all subsequent ledgers.

XRPL adds native KYC and AML controls

The core of the change is XLS-0070 ( “Credentials” ), a specification designed to allow issuers to certify facts about an XRPL account, such as identity verification or sanctions status, so that other participants can trust without exposing private documents on the chain. As explained in the XRPL documentation, “The Credentials function is a set of tools for managing authorization and compliance requirements using the XRP Ledger blockchain, respecting privacy and decentralization.” The design “is inspired by the W3C Verifiable Credentials standard,” adapting it so that the subject of a credential is an XRPL address instead of a URL.

The open-source specifications site of Ripple succinctly captures the institutional reason: “Credentials provide a set of tools to manage authorization and compliance requirements on the XRP Ledger, respecting privacy and decentralization,” an approach that makes the feature understandable for regulated actors who need certifications without building proprietary whitelists.

Functionally, the amendment introduces new objects and transactions at the protocol level so that certifications can be issued, accepted, referenced, and revoked on the chain. The XRPL Known Amendments registry lists the changes: three new transactions (CredentialCreate for the issuer to provide a credential, CredentialAccept for the subject to validate it, and CredentialDelete for revocation/cleanup), in addition to a new type of entry in the ledger called Credential. It also expands the existing DepositPreauth function so that deposit authorization can be expressed in terms of credential requirements, and adds a CredentialIDs field to various transactions (including Payment, EscrowFinish, PaymentChannelClaim, and AccountDelete) so that a sender can present a set of credentials when interacting with a destination that applies compliance controls.

It is crucial to highlight that personal documents never touch the blockchain. In a canonical flow, a company that must restrict interactions to KYC accounts appoints off-chain trusted issuers; the issuer privately verifies the user and then writes only a signed credential to the ledger. “The documents that [the user] submits… are never published or stored on the blockchain,” however, multiple counterparts can trust the same credential, avoiding redundant verifications. This balance - on-chain certifications, off-chain evidence - reflects the W3C Verifiable Credentials model while keeping the certifications portable through XRPL features.

The activation also fits into a broader roadmap aimed at institutional-level infrastructures. Credentials are a prerequisite and a complement to other permissioned constructions under consideration, such as Permissioned Domains and a Permissioned DEX, which expect participants to present valid credentials to access controlled liquidity or restricted domain markets. The documentation for these proposals explicitly links the application back to the Credentials, emphasizing that the identity layer is designed to be reusable across multiple product surfaces rather than being a one-time switch.

From an implementation standpoint, the feature has been visible to developers for months: the reference server versions of Ripple (rippled) highlighted Credentials among the new amendments, the set of documents provided end-to-end guidance and code examples for testing on Devnet, and the explorers tracked the validators' votes towards the threshold of 28/35. Today's enabling on the mainnet turns the “open for voting” feature into a production reality, allowing issuers, exchanges, and fintechs to build credential-controlled flows that settle atomically on XRPL.

Technically, the change is conservative but far-reaching. Because CredentialIDs can now accompany the standard Payment semantics, an institution can - at the protocol level - accept only deposits when the set of credential hashes presented matches a policy it has configured through DepositPreauth. This application occurs without custom middleware and is recorded in the transaction metadata, enhancing auditability for regulated entities.

Combined with existing primitives (trust lines, AMM, DEX, escrow), it paves the way for programmatic policies such as “accept euro-stablecoin from counterparts with an updated KYC credential from issuer X, and route currency exchange through a permissioned market if both parties meet the domain requirements”.

At the time of publication, XRP was trading at $2.82.

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