In a three-part series, Insights, Vibe reveals the grand vision of tokenization. He said that 72% of the more than 1,700 financial leaders who participated in Ripple’s recent global survey expect to explore tokenization in the next three years, cementing the technology’s position as a cornerstone of innovation.
In a three-part series, Insights, Vibe reveals the grand vision of tokenization. He said that 72% of the more than 1,700 financial leaders who participated in Ripple’s recent global survey expect to explore tokenization in the next three years, cementing the technology’s position as a cornerstone of innovation.
The increased interest and use of tokenization can be traced back to the numerous advantages that blockchain technology offers.
Tokenization is expected to help businesses maximize revenue through easier management, greater accessibility and more liquidity, from financial assets and real estate to property, event ticketing and carbon credits.
Tokenization can also increase access to an asset class by lowering traditional barriers to entry, reducing costs or asset prices, and removing geographic limitations.
Businesses can also benefit from the operational benefits that tokenized assets on the blockchain provide, such as faster transactions, lower management fees, and reduced costs.
Ripple uses the XRP Ledger (XRPL) as an example: a decentralized public blockchain designed specifically for financial use cases that has enabled over 2.6 billion transactions to be settled in real time for over a decade.
According to Ripple, the benefits of tokenization can only be realized when the markets for tokenized assets become more liquid and have a robust secondary market.
Ripple is already setting foot in the world of tokenization through its partner companies. For example, Ripple partner stem tokenizes carbon credits, so data is moved, managed and recorded on the blockchain.
In November 2023, HSBC announced that the company will work with Ripple-owned Metaco to develop a digital asset custody service for institutional clients planning to invest in tokenized securities or tokenized gold.
In 2024, Ripple CTO David Schwartz predicts that the tokenization of real-world assets (RWA) will drive the blockchain economy, with real estate and commodities leading the way. He predicts that tokenized RWAs on the XRP Ledger will enhance collateralized lending, improve interoperability, attract institutional adoption, and reshape the financial sector.
