Traditional finance (TradFi) organizations are becoming more receptive to the idea of tokenizing financial assets on public blockchains in the accelerating drive toward blockchain-based tokenization.
TradFi participants are at last moving financial assets on-chain to deploy for production and alleviate pain points across several value chains, according to RippleX senior vice president Markus Infanger.
During Paris Blockchain Week, Infanger said that TradFi’s utilization of blockchain technology is now finally becoming apparent. “We’re starting a paradigm shift for blockchain technology, moving beyond the hype and into real utility. It’s starting to unfold,” Infanger added.
According to study estimates, the executive stated that the future value of tokenized markets is estimated to be $16 trillion, which is eight times greater than the market capitalization of the entire cryptocurrency industry.
The executive stated, “A couple of years ago, many of us in this space were envisioning that. It’s getting closer to reality, and it’s happening on public blockchains. At some point, it looked like it would only happen on JPMorgan Coin or IBM.”
Infanger mentioned ongoing discussions with financial institutions exploring tokenization projects on the XRP Ledger. These firms have distribution lined up and clear use cases for the blockchain. In November 2023, HSBC partnered with Ripple-owned Metaco to enable institutional investors to hold tokenized securities on its new custody platform.
Infanger continued, saying that by combining different XRPL-using products, Ripple’s business is growing more comprehensive.
Although most people consider Ripple to be “a payments-first company,” offering a blockchain-based payment solution to reduce financial and economic friction, new advances are making the company more appealing to players in decentralized finance (DeFi) as well as TradFi.
Infanger clarified, “We have a custody arm, a payments arm and our contributions to the XRP Ledger. The combination is a holistic digital asset infrastructure value proposition for traditional finance and developers who want to solve DeFi problems.”
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