Tokenized asset market on public blockchains could hit $16T – RippleX VP

Traditional finance (TradFi) companies have warmed to the idea of ​​simulating financial assets on public blockchains as the race for blockchain-based tokenization heats up.

RippleX Senior Vice President Marcus Enfinger said that TradFi players are finally bringing financial assets on-chain as they seek to deploy products and address pain points in various value chains.

Speaking exclusively to Cointelegraph at Paris Blockchain Week, Infager said that TradFi's use of blockchain is finally becoming a reality.

“We are starting a paradigm shift in blockchain technology, moving beyond incentives to real service. “It's beginning to unfold,” said Infanger.

TradFi is looking for comprehensive blockchain solutions

According to the executive, research estimates peg the future value of tokenized markets at $16 trillion, eight times the total market capitalization of the entire cryptocurrency sector.

“A few years ago, many of us living in this place were thinking that. It's getting closer to reality, and it's happening on public blockchains. At some point, it seems to only happen at JPMorgan Coin or IBM.

Infanger is in advanced discussions with various financial institutions, and is exploring tokenization projects to extract assets on the XRP Ledger. These companies have a distribution pipeline and can define use cases and how they want to use the underlying blockchain.

A concrete example of this is HSBC partnering with Ripple-owned technology company Metaco to enable institutional investors to hold tokenized securities on its new escrow system in November 2023.

Infanger added that Ripple's business is becoming more comprehensive by combining different solutions that use XRPL.

While Ripple is widely seen as the “payments-first company” to use a blockchain-based payment solution to solve economic and financial disputes, recent developments are broadening its appeal to both TradFi and decentralized finance (DeFi) players.

“We have a custody arm, a payment arm and our contribution to the XRP Ledger. The combination is a universal digital asset infrastructure value proposition for developers looking to solve traditional finance and DeFi problems,” explained Infanger.

Ripple's stablecoin

Ripple's recent plans to launch its own USD stablecoin on XRPL complement Ethereum's offering to institutions. Cointelegraph previously spoke to Ripple's Chief Technology Officer David Schwartz about the details of the stablecoin.

Infanger added more detail to the motivation behind Ripple's stablecoin, highlighting that having $22 trillion off-chain means the stablecoin market could reach $2.8 trillion in five years.

“We're at $130 billion right now, so there's clear demand and a big growth trajectory. We're really still in the early days,” Infanger said.

Another key driver was the constant demand from developers in the XRPL ecosystem for a tier one stablecoin offering like USD Coin (USDC) or Tether (USDT). Infanger Ripple has used XRP (XRP) and the stablecoin in small tests with its payment product.

“We see our institutional DeFi use case on the one hand, tokenizing on XRPL and then on our payment product for alternatives and some issues with XRP using Stratico and for the XRP ecosystem in general.”

Ripple has yet to confirm when it will launch statscoin or what the XRPL and Ethereum-based token will be called.