As the broader digital currency ecosystem moves toward tokenization, Ripple CTO David Schwartz has hinted at some of the important benefits of these technological advances.
Benefits of tokenization
The concept of tokenization is flying around, but only a few understand or know what it really means. In Ripple Labs’ new X-series explaining a blockchain concept in 60 seconds, the Ripple CTO used real estate to explain the tokenization concept.
He said that since there is a lot of paperwork involved in purchasing assets, it becomes quite difficult to prove ownership of such properties. He believes that tokenization eliminates this challenge by strengthening the process of asset transfer and ownership. He said distributed ledger technologies will enable recording real estate sales, paying for properties and eliminating all factors of fraud.
“If someone can’t explain something in 60 seconds, they probably don’t understand it.” — Albert Einstein or Ripple CTO David Schwartz
In this #CryptoInOneMinute, @joelkatz explains how tokenization improves efficiency, proving that true understanding doesn’t need a full minute.”⏱️ pic.twitter.com/DvMqYuVoNC
— Ripple (@Ripple) May 24, 2024
He further pointed out how this ledger simplifies the process of borrowing against an asset. With tokenization, the person’s collateral can be registered on the chain and the lender can easily verify the ownership of the collateral. Depending on the key designs of the tokenization features, the lender can also gain insight into whether or not the individual is borrowing from a number of lenders at the same time.
Many financial giants are already testing tokenization features, and BlackRock is also joining this trend. Protocols like Chainlink specifically help fuel this tokenization agenda with the CCIP solution, among others.
Ripple Labs positioning
While Ripple Labs hasn’t categorically incorporated the roadmap into its own tokenization agenda, the company has immediate plans to launch a stablecoin later this summer. In its latest effort, Ripple Labs has filed a trademark for its stablecoin, revealing that it hopes to use the ticker symbol ‘RLUSD’.
The stablecoin ecosystem is growing and Ripple is optimistic about tapping into the market in a dominant manner.
