Institutional investors, asset managers and banks are suddenly doing everything they can to get financial assets on blockchains.

During Paris Blockchain Week, Markus Infanger of RippleX said that the market for traditional assets on the blockchain – also known as Real World Assets – could reach a market value of $16 trillion.

To illustrate, Bitcoin’s current market cap is just above the $1 trillion mark.

TradFi embraces blockchain

More and more traditional financial players (TradFi) are embracing the idea of ​​converting financial products into tokens on public blockchains. The race towards blockchain-based tokenization is therefore in full swing.

According to Markus Infanger, senior vice president at RippleX, TradFi companies are finally moving to blockchains. They want to put this technology into production to solve bottlenecks in various value chains.

In an exclusive interview during Paris Blockchain Week, Infanger said that TradFi’s use of blockchain is finally becoming concrete. “We are at the beginning of a paradigm shift for blockchain technology. We’re moving away from the hype and towards real applications. It’s really starting to happen now.”

TradFi wants complete blockchain solutions

Infanger also cited research that suggests the future value of tokenized markets could be as high as $16 trillion. That is eight times more than the total market capitalization of the entire crypto market.

“We already dreamed of this a few years ago,” says Infanger. “Now it is getting closer, and on public blockchains. At one point it seemed like this would only happen on platforms like JPMorgan Coin or IBM.”

Infanger says that advanced discussions are already underway with various financial institutions. These parties are investigating ways to tokenize and spend assets on the XRP Ledger. They already have distribution channels ready and can clearly indicate what they want to use the underlying blockchain for.

A concrete example of this is the collaboration between HSBC and Metaco, a technology company of Ripple. This will allow institutional investors to hold tokenized securities on HSBC’s new custody platform since November 2023.

Infanger added that Ripple’s business will be broadened by combining different solutions that leverage XRPL.

Ripple is often seen as a “payments-focused company” that offers a blockchain-based payment solution to reduce economic and financial friction. However, recent developments also make the company more attractive to both TradFi and DeFi (Decentralized Finance) players.

“We have a custody branch, a payments branch and we contribute to the XRP Ledger. The combination of this is an attractive proposition for a complete digital asset infrastructure, both for traditional finance and for developers looking to solve DeFi problems,” said Infanger.

Ripple’s own stablecoin

Ripple’s recently announced plans to issue their own US dollar-pegged stablecoin on XRPL and Ethereum further expand their offering to institutions.

Infanger explains why Ripple wants to release its own stablecoin. He emphasizes that the stablecoin market could reach $2.8 trillion in five years, as there are about $22 trillion in assets sitting outside blockchains.

“Right now we’re at $130 billion, so there’s clearly demand for it and it’s expected to grow tremendously. We are really still at the beginning,” says Infanger.

Another key driver was the constant demand from developers in the XRPL ecosystem for a leading stablecoin such as USD Coin or Tether. Infanger says that Ripple was already experimenting on a small scale with stablecoins in addition to XRP and their payment product.

“We really see a future for institutional use of DeFi, tokenization on XRPL and our payments product. The stablecoin can be used for additional options and certain use cases, together with XRP and for the entire XRP ecosystem.”

Ripple has not yet announced when the stablecoin will be launched or what the XRPL and Ethereum-based token will be called.


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