Traditional financial (TradFi) institutions are increasingly open to the concept of tokenizing financial assets on public blockchains as part of the growing trend towards blockchain-based tokenization.

Markus Infanger, the senior vice president of RippleX, noted that TradFi players are now transitioning financial assets onto the blockchain for practical use, addressing challenges across various value chains. He highlighted this shift during Paris Blockchain Week, emphasizing the move towards tangible blockchain applications beyond mere speculation.

Infanger projected a significant future for tokenized markets, estimating a value of $16 trillion, surpassing the cryptocurrency industry’s total market capitalization by eightfold. He expressed satisfaction in witnessing the evolution from conceptualization to realization, particularly on public blockchains, as opposed to the initially perceived exclusivity of platforms like JPMorgan Coin or IBM.

Discussions with financial institutions are underway regarding tokenization initiatives on the XRP Ledger, with firms already strategizing distribution and outlining clear blockchain use cases. In a notable partnership, HSBC collaborated with Ripple-owned Metaco in November 2023 to facilitate institutional investors’ custody of tokenized securities through a new platform.

Infanger highlighted Ripple’s expanding business scope through synergies among various XRPL-based products, emphasizing the company’s evolution beyond its traditional payment-centric reputation. The integration of custody services, payment solutions, and contributions to the XRP Ledger presents a comprehensive digital asset infrastructure catering to both traditional finance entities and DeFi participants seeking innovative solutions.

While Ripple has been predominantly viewed as a payment-focused entity, its recent developments are attracting interest from decentralized finance (DeFi) and traditional finance sectors alike. Infanger emphasized the holistic value proposition Ripple offers, positioning itself as a key player in addressing DeFi challenges and meeting the evolving needs of the financial industry.

For further reading: Over $1B U.S. Treasury Notes Tokenized on Blockchain