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Ripple’s chief technology officer and co-creator of XRPL David Schwartz has taken part in Ripple’s series of educational videos called “Crypto in a minute.”
He spoke of real world assets (RWA) tokenization, its benefits for users and what Ripple can offer in this sphere. The video was shared by Ripple enthusiast @BankXRP.
"Tokenization can improve efficiency"
David Schwartz recorded a short video (lasting less than a minute) about how the tokenization of the physical can help greatly improve efficiency in the real world.
As an example, Schwartz talked about real estate, and tokenizing a house in particular. He stated that tokenization of a house would make a lot of things easier when dealing with one's house in the real world – ownership, mostly, and various sides of this important aspect. This includes selling a house in parts, proving that the seller indeed owns the house and also proving ownership when the house is staked as collateral to borrow money.
RWA tokenization with trillions in USD potential and Ripple
Earlier this week, Ripple published a blog post on real world asset tokenization and the place Ripple intends to take in this market using the XRP Ledger it works with. According to it, the San Francisco-based blockchain decacorn promises “unique advantages” for tokenized RWA issuers.
It is very simple to create a token on the XRPL, and those tokens will be available for trading right away on the XRPL-based decentralized exchange (DEX). No knowledge of any programming languages or smart contracts is required for issuing a token. Those tokens can be used across various financial products.
The article has named a few major use cases for RWA tokenization – tokenized treasuries, real estate (mentioned by Schwartz in the video), tokenized debt and yield strategies.
Yuri MolchanObstacles arise in way
However, despite various rosy promises not only from Ripple but from other market players, certain significant hurdles are still in the way, are preventing RWA tokenization from reaching its full potential.
A major one is the same hurdle that many blockchain apps stumble over – blurred regulatory rules, especially if they vary from one jurisdiction to another. Another thing that is necessary for the success of this technology is interoperability between blockchains and ensuring safe ownership and settlement – these are “top priorities for the continued growth of the tokenized economy.”
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