David Schwartz, chief technology officer of Ripple, has dropped hints about some major advantages of tokenization, which is making waves in the digital currency environment.
There has been a lot of talk about tokenization, but few people have a firm grasp on what it entails. Using real estate as an example, the Ripple CTO explained the tokenization idea in a 60-second video for Ripple Labs’ new X series.
He made the point that it becomes quite difficult to verify ownership of such assets due to the extensive documentation required to purchase them. Because tokenization makes asset transfer and ownership more solid, he thinks it does away with this problem. According to him, distributed ledger technologies make it feasible to record real estate deals, pay for properties, and eliminate fraud-related concerns.
He continued by explaining how this ledger makes collateralized lending easier. Tokenization allows the borrower to register their collateral on the blockchain, which the lender can then use to readily confirm who owns the collateral. Lenders may be able to tell whether a borrower is using many lenders simultaneously based on the important elements of the tokenization process.
Along with other major financial institutions, BlackRock is testing out tokenization features. Tokenization initiatives are receiving a boost from protocols like Chainlink, which, among other things, offers a CCIP solution.
Despite the fact that Ripple Labs’ tokenization strategy has not provided a clear roadmap, the company is already planning to introduce a stablecoin later this summer. Ripple Labs has taken the following step in its campaign by trademarking its stablecoin, indicating its intention to utilize the ticker symbol “RLUSD.” With the stablecoin ecosystem expanding, Ripple is hopeful of establishing a strong presence in the market.
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