XRP Ledger Plans Upgrade to Prevent Stablecoin Partners From Minting Tokens Without Approval

The XRP Ledger has proposed a security upgrade to prevent unauthorized stablecoin minting, closing a permission loophole that could allow approved partners to create tokens without issuers’ consent or authorization.

XRP Ledger Upgrade Targets Unauthorized Token Creation

According to the official XRP Ledger documentation, developers should not give delegating permissions of burning tokens until the network is planned to be corrected. The vulnerability affects accounts holding the PaymentBurn permission, which normally allows them to destroy issued tokens.

However, certain conditions could let those accounts create tokens without receiving the separate PaymentMint permission. For instance, stablecoin issuers may authorize payment providers to burn tokens during customer redemptions.

The amendment would prevent certain loan records from showing overdue payments before their contractual deadlines. According to XRPL developers, the issue affects issued assets, including stablecoins and multipurpose tokens.

Meanwhile, the supply of XRP is not dependent on the impacted permission mechanism. Developers included the fixCleanup3.4.0 amendment in XRP Ledger version 3.4.0, released in September.

Earlier, XRPL developers addressed another security vulnerability through an emergency software release. The October incident had to do with payments engine, and was unrelated to the current permission problem.

XRPL Validators Approach November 4 Activation

According to XRPLWin’s amendment tracker, 33 of 35 trusted validators supported the proposed upgrade on November 2.

Under XRPL network rules, an amendment must receive more than 80% validator support for 14 consecutive days before activation.

Developers had hoped that the activation would be on October 23, after a voting period. However, support briefly dropped to 26 validators on October 21, restarting the countdown.

With validators back and continued support, November 4 was now the earliest possible activation date. The network had not activated the amendment as of November 2.

XRP Ledger Fix Includes Lending and Vault Corrections

The amendment doesn’t just apply to permissions, but also covers mistakes in calculating deposits, withdrawals, and the recovery of assets in the vault.

The developers have created the fixes to enhance the transaction handling in both automated market makers and lending systems.

The changes would not allow for the appearance of overdue payments on certain loan records before the contractual due dates.

Meanwhile, XRPL’s lending protocol remains under validator review, following October’s proposal to introduce revised accounting rules.

The separate lending and Single Asset Vault amendments had 19 and 21 validator votes, respectively. Both still required additional support before starting their 14-day approval periods.