Global money supply surged to a fresh all-time high in December 2025, reinforcing a liquidity backdrop that has historically supported hard assets.

Gold has responded accordingly, maintaining its upward trajectory despite sharp but brief drawdowns. Nonetheless, Bitcoin, often described as “digital gold,” has delivered choppier price action.

Bitcoin’s Dual Identity Weighs on Price as Risk Appetite Fades

Global liquidity has continued to expand at a rapid pace. According to the Kobeissi Letter, global broad money supply rose to a record $144 trillion in December 2025. On a year-over-year basis, it increased by $13.6 trillion or 10.4%.

The December figure marked the third consecutive month of accelerating growth.

“Since the 2020 pandemic alone, money supply has surged +$44 trillion, or +44%. The fastest increase over this period was recorded in February 2021, at +18.7%. Global money creation has never moved this fast outside of a crisis,” the post read.

If global money supply is hitting an all-time high, the classic expectation would be: More liquidity → higher hard assets. Jurrien Timmer, Director of Global Macro at Fidelity, highlighted that gold is behaving according to that script while Bitcoin is not.

Timmer noted that despite volatility and a 21% drawdown earlier this month, gold has remained resilient. He said the metal has behaved as typically seen in a bull market, with sharp but short-lived pullbacks that quickly attract renewed buying interest.

“Gold may be the ultimate hard money asset and it has been following the global money supply in lockstep. Bitcoin is thought to be the same, but as the chart shows below, its price action vis-à-vis global liquidity has been a lot choppier than gold,” he said.

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Timmer explained that the reason for the disconnect is simple. According to him, gold is only one thing, i.e, “hard money.” Bitcoin, meanwhile, occupies a dual identity: a potential hard currency on one hand, and a speculative asset on the other.

The Fidelity executive further added that when the rate of change in the software and SaaS index is added to money supply growth, it becomes clear that when the speculative component of the market turns negative, it can easily override the liquidity tailwind that would otherwise support BTC.

He noted that periods characterized by both expanding liquidity and strong speculative appetite have historically amplified bullish conditions. This often results in powerful bull markets. However, the dynamic works in reverse as well.

“Right now, we have ample liquidity growth but a bear market in speculation. The result: Bitcoin is languishing while gold and the money supply are rallying,” he remarked.

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For now, the gap between gold and Bitcoin illustrates that rising liquidity alone does not guarantee crypto’s performance when speculative appetite is contracting. Whether Bitcoin will regain alignment with global liquidity likely depends on speculative interest returning to crypto markets, something that remains uncertain as February 2026 closes.

Key Highlights

• 180-day token lock required for WLFI governance participation
• Enhanced voting influence based on stake amount and lock time
• Annual 2% incentive for engaged governance voters
• Node tiers enable USD1 conversions and exclusive benefits
• USD1 stablecoin scales through banking license and multi-chain deployment

World Liberty Financial has unveiled a governance restructuring initiative that connects voting privileges to extended staking commitments. The framework establishes a six-month minimum lock requirement for previously unlocked WLFI tokens to gain governance access. This strategy seeks to enhance protocol commitment and stimulate broader engagement within the USD1 stablecoin ecosystem.

Governance Structure Redesigned Around Mandatory Lock Periods

World Liberty Financial has released details of a governance model requiring unlocked WLFI holders to commit tokens through staking before voting on protocol decisions. The framework mandates a 180-day lock duration and calculates voting influence according to both stake volume and time remaining in the lock period. Tokens already locked retain their governance capabilities without needing further action.

The system offers a baseline incentive of 2% annually for users who cast votes in a minimum of two governance proposals throughout their staking period. The WLFI treasury serves as the funding source for these incentives and supports continued community alignment. According to the project team, this design prioritizes influence among token holders demonstrating long-term commitment.

For the proposal to become active, it must achieve a quorum representing one billion eligible WLFI tokens. Following quorum achievement, passage requires simple majority support. Current market circulation exceeds 27 billion WLFI tokens.

Multi-Tier Staking Structure and USD1 Ecosystem Development

The governance plan establishes multiple tiers offering distinct advantages corresponding to staking volumes. Token holders committing at least 10 million WLFI achieve Node classification and unlock stablecoin conversion capabilities. These services facilitate direct 1:1 exchanges between USDT or USDC and USD1, alongside direct fiat withdrawal options.

Users staking above 50 million WLFI earn Super Node designation. This advanced tier provides partnership opportunities and potential economic benefits tied to protocol collaborations. The tiered approach is designed to encourage deeper participation and broaden WLFI’s institutional footprint.

The framework also integrates staking advantages with USD1 utilization throughout WLFI Markets. Token stakers receive benefits for USD1 deposits plus supplementary incentives facilitated through DeFi platform Dolomite. The development team anticipates this mechanism will generate consistent demand within the lending infrastructure.

Multi-Chain Stablecoin Growth and Regulatory Strategy

USD1 has been expanding its presence across numerous blockchain networks and platform integrations following its 2025 debut. The stablecoin’s backing consists of cash holdings and U.S. Treasury securities, managed by BitGo with monthly verification reports and multi-chain compatibility. Recent circulation growth accelerated following a significant arrangement involving Abu Dhabi’s MGX fund and Binance.

The initiative has also moved forward with its regulatory positioning through a banking license submission. WLTC Holdings submitted an application to create a national trust bank focused exclusively on stablecoin services. This institution would unify issuance, safekeeping, and conversion functions under single oversight.

WLFI has additionally authorized treasury funds to support USD1 integration across major platforms. The team subsequently introduced World Swap to enable international transfers using USD1 as the settlement mechanism. WLFI Markets continues experiencing increased activity, highlighting the stablecoin’s foundational importance throughout the expanding ecosystem.

TLDR

• HEICO achieves best-ever first quarter earnings, yet shares decline in early trading.

• Revenue jumps 14% to reach $1.18B with Flight Support segment leading the charge.

• Flight Support profitability climbs to 24.5% driven by favorable mix and operational gains.

• Electronic Technologies expands revenue but faces margin compression from product mix changes.

• Leverage ratios increase following acquisition activity, though outlook remains optimistic.

Shares of Heico (HEI) experienced downward pressure despite the aerospace and defense supplier delivering its best quarterly earnings performance on record. The stock, which closed at $344.72, retreated to $324.59 during pre-market hours. This pullback came after the company unveiled results demonstrating substantial progress throughout its primary operating divisions.

HEICO Corporation, HEI

Company Achieves Best-Ever Quarter With Double-Digit Sales Expansion

Heico’s first-quarter performance demonstrated impressive financial momentum with net income surging to $190.2 million. The company achieved diluted earnings of $1.35 per share, representing a year-over-year advancement. Consolidated net sales jumped 14% to $1.18 billion, showcasing robust demand dynamics.

The company’s operating income climbed to $259.9 million while maintaining healthy profitability levels. EBITDA grew 14% to hit $312 million, demonstrating effective operational leverage. Cash flow from operations declined to $178.6 million, primarily attributable to timing of employee compensation payouts.

Leverage indicators moved higher following a recent strategic acquisition that expanded balance sheet commitments. The net debt to EBITDA ratio climbed to 1.79x while total debt relative to net income also increased. Despite these metrics, leadership expressed strong optimism regarding fiscal 2026 trajectory.

Flight Support Division Powers Results With Organic Expansion

The Flight Support Group demonstrated exceptional performance with revenue climbing to $820 million for the period. Organic demand accelerated 12%, reflecting strength across the division’s diverse product portfolio. Recent acquisition contributions supplemented organic gains and bolstered overall segment results.

The division’s operating income surged 21% to $200.7 million during the quarter. Profitability expansion stemmed from reduced selling, general and administrative expense ratios combined with advantageous product mix dynamics. Elevated repair and overhaul activity further enhanced bottom-line results.

Operating margins within the segment reached 24.5%, surpassing the prior-year comparison. Enhanced operational execution drove the improvement alongside robust end-market demand conditions. The division sustained its positive trajectory and remained a key contributor to consolidated results.

Electronic Technologies Division Faces Margin Headwinds Despite Sales Growth

The Electronic Technologies Group reported net sales of $370.7 million, benefiting from strong demand across aerospace and electronic components markets. Organic revenue growth of 6% helped counterbalance softer performance in space-related product lines. Recent acquisitions contributed incremental revenue and diversified the business mix.

Operating income for the segment decreased to $73.2 million as profitability faced challenges from an unfavorable shift in product composition. Weakness in space-oriented offerings pressured gross margins during the period. Stronger aerospace demand partially mitigated these headwinds.

The division’s operating margin came in at 19.8%, reflecting the evolving product portfolio dynamics. Margin compression persisted as defense and space order patterns shifted throughout the quarter. Nevertheless, the segment’s revenue performance remained solid and aligned with management’s longer-term projections.

Bitcoin price has drifted lower in recent sessions, reflecting cautious sentiment across the crypto market. BTC continues to struggle beneath key resistance, limiting upside momentum. 

Despite the slow decline, structural signals show accumulation beneath the surface. Whether that conviction translates into price recovery is yet to be seen.

Bitcoin Holders Near New Milestone

Santiment data shows Bitcoin is nearing a significant milestone. The network is about to surpass 20,000 wallets holding at least 100 BTC. At current prices, a 100 BTC wallet represents roughly $6.78 million in value.

Such wallets are typically controlled by high-net-worth individuals, institutional investors, funds, or long-term holders. Growth in this category during price pullbacks is often interpreted as a constructive signal. Accumulation during weakness reflects confidence in long-term fundamentals.

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However, the overall percentage of supply held by key stakeholders has not materially increased. This suggests that distribution is occurring across more large holders rather than consolidating within a smaller elite group. While this reduces extreme concentration risk, it also limits aggressive price acceleration. Broader accumulation may stabilize price but not immediately trigger sharp rallies.

Bitcoin Holders Exhibit Mixed Sentiment

Old supply data adds another layer to the outlook. Old supply refers to Bitcoin that has not moved in at least six months. These coins are often associated with patient, long-term holders.

Over the past three weeks, old supply increased by 188,000 BTC, valued at more than $12.75 billion. Rising old supply indicates that mature hands are choosing to hold rather than distribute. Historically, this behavior has supported longer-term recovery phases when selling pressure diminishes.

Derivatives data present a more cautious picture. Aggregate funding rates across Binance show that Bitcoin is currently being shorted. Negative funding rates signal that short positions are dominating longs.

Red funding bars over the last 24 hours indicate traders are positioning for potential downside. If short bias persists, BTC may face continued consolidation. Elevated short interest can cap near-term rallies unless a strong catalyst forces short covering.

BTC Price Is Under Slight Pressure

Bitcoin is trading at $67,867 at the time of writing, remaining below the $68,830 resistance level. The asset has formed a mild downtrend line over the past 20 days. A decisive move above $70,000 would shift momentum and signal renewed bullish strength.

Accumulation growth and expanding large wallet counts provide a supportive backdrop. If conviction strengthens and price responds, BTC could break above $70,000. Crossing $72,294 would mark a structural recovery phase and potentially attract renewed inflows.

However, divergence between spot accumulation and derivatives skepticism may limit upside. Continued formation of lower highs would reinforce the downtrend line. In that scenario, Bitcoin could slide toward the $66,224 support. A sustained move below this level would invalidate the bullish outlook and extend consolidation pressure.

One of the project’s co-founders explained the latest introduction by the team, which promises to take a “different approach.”

Although a growing number of its vast online community keeps lashing out at Pi Network’s lack of progress in certain areas, the Core Team continues to introduce new initiatives to improve the ecosystem.

One of the latest was the incorporation of Pi ecosystem tokens on Mainnet, and co-founder Chengdiao Fan explained in a detailed video their idea and purpose.

What Are Pi Ecosystem Tokens?

She began by indicating that these new assets are tokens created by the community itself and issued on Pi. They have already been released on the Testnet, while their launch on the Mainnet is being “finalized.” Fan acknowledged the importance of security and technology for the new tokens, but noted that their design is what will set them apart. She believes there’s a significant misalignment between token design and real innovation.

“Tokens on most other crypto networks function primarily as tools to raise capital. Yet, despite this approach, most projects frequently fail to provide real utility and innovation. We see this as a structural problem.”

She explained that Pi Network is positioned differently and its ecosystem allows its users to integrate crypto tokens for products and innovations. It “strongly encourages” real utility as the team believes this is the main driver for long-term stability and success for any blockchain project.

Utility Tokens for User Acquisitions

These assets, through the Pi launch programs, mean that “projects issue tokens to fulfill the need to acquire users for their products and integrate these tokens for utility-based use cases inside their products.” Users will get full access to these new coins through the launch programs and will be able to use them in the products.

Fan added that developing such user-engaging programs that allow them to operate within a startup ecosystem is typically a long and expensive process. However, they can reduce the costs significantly by using Web3 tools from Pi Network, such as the Pi ecosystem tokens. Simultaneously, they can involve users in their projects.

It’s worth noting that acquired users will be able to hold the products accountable for their services. Consequently, Fan said this would guarantee that users get the most for their funds, as weak products will naturally disappear in time.

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“Pi ecosystem tokens are not about copying existing token models. In fact, we have deliberately sought to avoid the traditional approach. Because many of the problems in Web3 stem from how tokens have been traditionally designed. And this design will also evolve as it gets iterated in practice,” Fan concluded.

Key Takeaways

• Bitcoin declined 1.5% on Friday to approximately $67,766 while maintaining a modest 0.6% gain for the week within a constrained price channel
• Market observers characterize the downturn as a leverage liquidation event rather than a directional shift, with demand resuming by Friday’s open
• Alternative cryptocurrencies surpassed Bitcoin’s weekly performance — Cardano climbed 7%, Solana rose 5.5%, Ethereum gained 4.8%, BNB advanced 4.3% — while XRP declined 0.1%
• Nvidia (NVDA) dropped 5.5% following quarterly results, weighing on U.S. equity futures and dragging digital assets lower alongside traditional markets
• Asian stock markets are headed for their strongest February performance since 1998, siphoning investment flows from American exchanges

Bitcoin experienced downward pressure Friday as U.S. equity index futures retreated in the wake of Nvidia’s notable share price decline. The cryptocurrency weakness reflects a wider risk-averse sentiment spreading through international financial markets.

Bitcoin was changing hands near $67,766, representing a 1.5% daily decrease. However, the leading digital currency maintains a 0.6% weekly advance.

Ethereum decreased 1.5% over 24 hours to slightly above $2,047. Both leading cryptocurrencies continue trading within tight boundaries established following the Feb. 5 market correction.

Nvidia tumbled 5.5% Thursday despite surpassing fourth-quarter profit forecasts. The decline seemingly captured market skepticism regarding the sustainability of elevated artificial intelligence expenditure justifying current price levels.

Digital currencies mirrored equity weakness as market participants retreated from higher-risk instruments. This correlation has persisted for several weeks, with Bitcoin demonstrating strong sensitivity to Nasdaq movements.

“The current market action shows Bitcoin behaving like a conventional risk asset,” explained Daniel Reis-Faria, CEO of ZeroStack. “The Nasdaq retreated following Nvidia’s results, and cryptocurrency markets tracked that movement.”

He characterized the decline as a technical adjustment rather than a fundamental shift. “Considerable leverage had accumulated during the recent rally, and when equities weaken, crypto typically serves as the initial de-risking outlet for traders.”

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By Friday’s trading session, hourly cryptocurrency returns had reversed into positive territory. This recovery pattern indicates renewed buying interest following overnight liquidations that eliminated excessive leveraged positions.

Alternative Tokens Show Weekly Strength Over Bitcoin

Cardano topped major cryptocurrency performance with a 7% weekly increase. Solana advanced 5.5%, Ethereum gained 4.8%, and BNB rose 4.3%, each surpassing Bitcoin’s weekly results.

XRP represented the sole major token posting negative seven-day returns, declining 0.1% weekly and 3.7% over 24 hours. This relative weakness proved notable considering most alternative cryptocurrencies weathered identical macroeconomic headwinds while preserving gains.

Equity Index Futures and International Capital Movements

Dow futures retreated approximately 0.6%, S&P 500 futures fell 0.4%, and Nasdaq 100 futures declined 0.3% during Friday’s overnight session.

Asian stock markets are positioned for their most robust February showing since 1998. South Korean technology equities surged approximately 20% this month as capital flows favored AI infrastructure companies.

The MSCI Asia Pacific Index appears set to exceed S&P 500 returns for a third consecutive month. This geographical rotation has redirected investment capital from American markets.

Block shares surged over 23% in after-hours trading following CEO Jack Dorsey’s announcement of nearly 50% workforce reduction, attributing the restructuring to artificial intelligence capabilities transforming company operations.

Market attention now shifts to Friday’s producer price index release, with economic forecasters projecting a 0.3% monthly increase for both headline and core wholesale inflation metrics.

Ripple is transforming how funding and support are distributed across the XRP Ledger ecosystem, shifting toward a more distributed model.

The company announced the changes on February 26. It positions 2026 as a transition point in how builders access capital, mentorship, and technical support on XRPL.

XRP Ledger Enters New Phase as Ripple Expands Funding Channels in 2026

In a recent blog, Ripple noted that since 2017, it has deployed more than $550 million into XRP Ledger ecosystem initiatives, including non-equity grants, builder incentives, strategic partnerships, and growth programs. 

The firm noted that 2026 introduces a transition toward a broader, more distributed funding structure. The stated goal is to give builders multiple funding channels.

“As the ecosystem matures, the focus is shifting toward expanding access to funding through more distributed and independent pathways so builders have multiple avenues to scale,” the blog read.

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As part of the plan, the organization introduced several new and scaled-up initiatives planned for 2026.

XAO DAO is a hybrid Decentralized Autonomous Organization (DAO) built for the XRP Ledger. It will empower members to collectively allocate resources through community grants, feedback loops, and direct DAO proposals. Additionally, this enables fast, low-friction funding for developers and early-stage projects.

“By shifting decision-making power toward a broader group of stakeholders, XAO DAO represents a significant step toward a more resilient and community-led governance model for the XRPL,” the firm said.

XRPL Commons, an independent organization, will continue supporting builders through initiatives like the GLOW program and The Aquarium, a 9-week incubator in Paris that has operated since 2023. The firm is also developing a new regional entity, XRP Asia, to serve the APAC builder community with localized funding and support.

In addition, the University Digital Asset Xcelerator (UDAX), which launched its inaugural cohort with UC Berkeley in fall 2025, is expanding in 2026 to Fundação Getulio Vargas in São Paulo, the University of Oxford, and UC Berkeley again in the fall.

On the institutional side, Ripple is launching a FinTech Builder Program to support startups building institutional-grade financial applications on XRPL.

The blog also revealed that a growing number of venture capital firms are mentoring teams, investing in startups, and connecting XRPL builders with global capital networks. Partner organizations include a100x Ventures, Superscrypt, Reforge, New Form Capital, Dragonfly, Pantera, Franklin Templeton, and Tenity. Their involvement signals broader institutional confidence in XRPL.

To enable access to this expanding ecosystem, Ripple announced that a new dedicated XRPL funding hub will soon launch. This will serve as a single entry point for builders to discover grants, accelerators, and support programs across the entire ecosystem.

XRP Price Slides Despite Ripple’s 2026 Expansion 

The new initiatives come as XRP’s performance continues to track the broader market. BeInCrypto Markets data shows that the altcoin declined 2.24% over the past day. At press time, XRP was trading at $1.41.

In the short term, the funding shift is unlikely to move XRP’s price. Market performance is typically driven by liquidity conditions, macro trends, and regulatory developments rather than ecosystem restructuring. 

Over the medium- to long-term, the impact depends on execution. If the FinTech Builder Program, XAO DAO, and venture participation translate into higher on-chain activity, institutional pilots, and real financial applications, sentiment could strengthen. 

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Sustained adoption, transaction growth, and deeper integration of XRP into payment or tokenization flows would be required for any structural price effect to occur. Ultimately, usage metrics, not funding headlines, will determine whether this shift supports long-term valuation.

Morgan Stanley, a Wall Street bank managing nearly $9 trillion in assets, plans to offer clients Bitcoin (BTC) custody, trading, lending, and yield-generation services.

The firm is one of the largest financial institutions in the United States. In addition, the client base spans retail investors, high-net-worth individuals, and institutional players.

Why it matters:

• Morgan Stanley’s entry into BTC services would give clients direct access to Bitcoin through a regulated, trusted institution.
• Furthermore, adding yield and lending products expands BTC’s utility beyond simple custody, attracting clients seeking returns on digital asset holdings.
• Wall Street adoption at this scale signals Bitcoin’s shift from speculation to structural integration in global finance.

The details:

The big picture:

• In addition, River data shows Fidelity Investments, Bank of America, and Morgan Stanley each recommend clients allocate 1–5% of portfolios to BTC.
• Meanwhile, Morgan Stanley’s move follows a broader trend of major banks expanding crypto service offerings to institutional and retail clients.

[PRESS RELEASE – San Francisco, CA, USA, February 26th, 2026]

PACT, the leading on-chain credit and payments infrastructure protocol and #1 RWA protocol on Aptos, today announced that its native token, $PACT, is now supported on the world’s most trusted cryptocurrency exchanges, including Kraken, MEXC, and Gate.

PACT Expands Access as It Builds the Future of On-Chain Finance

PACT enables end-to-end, fully programmable credit infrastructure, supporting origination, servicing, repayments, covenants, waterfalls, and stablecoin settlement entirely on-chain. Unlike traditional RWA protocols that wrap off-chain credit in tokens, PACT embeds the credit system itself into blockchain rails.

Today, PACT technology is used by fintech lenders, asset managers, and financial institutions operating across emerging markets. Its infrastructure supports real-time, cross-border stablecoin flows and high-frequency micro-loan origination at scale. It enables fully automated credit facilities with built-in risk management and end-to-end repayment and settlement pipelines.

PACT runs on Aptos, leveraging its low-latency, high-throughput architecture to deliver real-time financial operations at scale. This allows credit markets – historically fragmented, slow, and opaque – to operate at the speed, automation, and transparency of a modern financial internet.

Understanding $PACT

The $PACT token serves as the core coordination and participation layer of the protocol, enabling users and stakeholders to directly shape the network’s evolution. As the native governance asset for the PACT DAO, $PACT empowers its decentralized community of token holders to propose, vote on, and implement protocol upgrades while guiding the long-term direction of PACT’s on-chain financial infrastructure. It’s used to facilitate ecosystem rewards, support community growth, and ensure transparent management of protocol revenue and treasury resources.

“Being supported by major exchanges opens the door for more people to join PACT’s community governance and contribute to the future of global credit markets. Every step like this brings us closer to a world where credit and financial access are open, transparent, natively on-chain, and available to everyone,” said Zander Rafael, Co-Founder Pact Labs.

The token underpins the system’s economic utility through staking, which strengthens network security, aligns incentives among participants, and distributes governance power based on long-term commitment.

These functions make $PACT an essential component of the protocol’s operation and the foundation for a sustainable, community-driven financial network.

A Year of Breakthrough Momentum

PACT’s ecosystem has expanded rapidly over the past year, achieving several major milestones:

• $1.9B+ total loans originated on-chain through PACT-powered fintech partners
• Hundreds of thousands of embedded wallets created through PACT SDKs
• 2,000+ loans per day originated
• Creation of end-to-end stablecoin payroll and credit flows

These achievements demonstrate the global demand for programmable, on-chain financial systems and the critical role PACT plays in making credit more accessible, transparent, and efficient.

A New Phase of Global Accessibility

Support on these exchanges introduces PACT to a broader global audience, making it easier for users, partners, and developers worldwide to access and interact with the PACT ecosystem.

Kraken, MEXC, and Gate’s listings reinforce PACT’s position as a leading protocol building the foundation for the next generation of blockchain-powered financial systems.

About PACT

PACT develops the core wallet, data, and payment rails that bring asset-based lending fully on-chain. Our infrastructure enables fintechs and asset managers to access stablecoin capital, manage repayment flows, and scale lending operations across borders. Unlike projects focused on wrapping large institutional loans, PACT proves the model with high-frequency lending, facilitating thousands of smaller loans each day through our partners. This approach reduces reliance on traditional intermediaries, lowers the cost of capital, and expands access to credit. By helping fintechs transition into stablecoin-powered financial institutions, PACT is advancing both stablecoin adoption and the modernization of global lending.

Users can follow PACT

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In a security-focused update, the XRP Ledger Foundation (CRYPTO: XRP) confirmed it patched a critical flaw in an upcoming amendment to Ripple’s XRP Ledger, averting a potential on-chain exploit. On February 19, a Cantina security engineer and its AI assistant detected a logic flaw in the signature-validation routine tied to a code batch amendment. The amendment had entered voting but had not activated on mainnet, and officials stressed that no funds were at risk at the time. The incident underscores how on-chain governance, automated discovery, and rapid patching interact in the evolving security landscape of public blockchains.

Key takeaways

• The flaw resided in the signature-validation logic of a code-batch amendment slated for the XRP Ledger, creating a theoretical path to unauthorized transactions if exploited.
• The amendment was still in the voting phase and had not been activated on mainnet, meaning funds were not exposed at the time of discovery.
• Cantina AI’s autonomous vulnerability hunter Apex identified the issue, highlighting the role of AI-powered tooling in proactive security workflows.
• The XRPL Foundation described the potential exploit as capable of eroding confidence in the XRP Ledger and destabilizing the broader ecosystem if left unpatched.
• An emergency patch, rippled 3.1.1, was released on February 23 to block the amendment from activating, reflecting a rapid, coordinated response by the Ripple engineering and validator communities.

Tickers mentioned: $XRP

Market context: The episode arrives amid increasing attention on governance safety, on-chain upgrade processes, and the growing use of AI-driven security tools to identify flaws before they can be exploited. While no funds were at risk in this instance, the incident underscores how rapid disclosure, responsible patching, and a mature validator environment help preserve confidence in public ledgers as the crypto industry navigates ongoing macro and regulatory uncertainties.

Why it matters

The XRPL ecosystem demonstrated a disciplined, defense-forward response to a potential class of vulnerability that could have had outsized consequences. In this case, the vulnerability lay in a signature-validation routine tied to a prospective amendment. Because the amendment had not yet activated on mainnet, the risk remained theoretical, but the XRPL Foundation’s decision to halt its momentum and push for a secure fix illustrates how governance processes can act as a safeguard against mischief or misconfigurations before they ever affect real users or funds.

Beyond the immediate incident, the episode spotlights the balance between improvement and risk in decentralized networks. Amendments that modify validation logic or consensus rules are powerful but carry operational risk; the governance cycle—proposal, testing, voting, and activation—must be coupled with robust security testing to prevent drift between code intent and on-chain behavior. The XRPL Foundation’s emphasis on a clear, auditable patch path reinforces the importance of reliability as developers push new features and optimizations onto a live ledger used by institutions and individuals alike.

On the security tooling front, the event contributes to a broader narrative about AI-enabled defense. Cantina AI’s autonomous discovery tool—Apex—identified the bug through static analysis of the rippled codebase and submitted a disclosure that allowed Ripple’s engineering teams to validate and patch the issue. This incident sits within a growing backdrop where AI-driven scanners and automated auditing are increasingly deployed to detect flaws that human inspectors might miss. Anthropic’s Claude Code Security, unveiled just days earlier, has already become a talking point in security circles, illustrating a trend toward AI-powered reasoning in vulnerability detection and remediation. As AI tools become more integrated into software development and security workflows, the industry may see faster mitigations but also a need to manage the risk of false positives and new threat surfaces introduced by automated processes.

A successful large-scale exploit could have caused substantial loss of confidence in XRPL, with potentially significant disruption for the broader ecosystem.

The investigation also aligns with broader discussions about the economics of security in crypto networks. Cantina’s Hari Mulackal has framed the potential impact in monetized terms, noting that the hypothetical loss could have been dramatic, given the scale of the XRP market capitalization. While the specific asset’s price is subject to broader market dynamics, the emphasis here is on preserving trust and functionality within the ledger’s architecture, rather than on short-term price moves.

In tandem with the technical response, the incident demonstrates how AI-enabled security tooling is reshaping incident response in crypto. The use of automated code analysis, prompt vulnerability disclosure, and rapid patching can shorten the window during which an attacker could act, shifting risk dynamics in favor of users and validators who uphold the network’s integrity. The ripple effect across ecosystems is unlikely to be isolated to one project; as more blockchains integrate similar tools, the bar for secure upgrade processes rises, potentially reducing the frequency and severity of major exploits in the future.

What to watch next

• Monitor updates on the amendment’s voting status and any new disclosures from XRPLF and Ripple’s engineering teams, including patch notes and rollback options if needed.
• Watch validator participation in rippled 3.1.1 adoption and downstream effects on on-chain performance and upgrade timelines.
• Follow Cantina AI’s ongoing research and any subsequent bug disclosures related to XRPL or comparable codebases embedded in other ledgers.
• Assess how AI-driven security tools influence governance and incident response timelines across the broader crypto ecosystem.

Sources & verification

• XRPL Foundation vulnerability disclosure report (xrpl.org/blog/2026/vulnerabilitydisclosurereport-bug-feb2026).
• XRPLF status update confirming the non-activation of the amendment on mainnet and the emergency mitigation (XRPL Foundation).
• Cantina AI and Spearbit leadership statements about the discovery and the Apex autonomous vulnerability hunter (X thread: https://x.com/hrkrshnn/status/2027191844988424343).
• Rippled 3.1.1 emergency patch details and rollout timing (XRPLF status updates).

What the wider story changes: patching a future risk