March 27, 2024
Latest Cryptocurrency News

Ripple Partners with Axelar Foundation, Advancing Tokenization of RWAs

In a strategic move aimed at advancing the tokenization of real-world assets (RWAs), Ripple has joined forces with the Axelar Foundation. The partnership will introduce interoperability to the XRP Ledger (XRPL) blockchain by leveraging Axelar’s General Message Passing (GMP) protocol. This collaboration enables developers to execute smart contract calls on more than 55 blockchains, facilitating the cross-chain deployment of decentralized applications on XRPL.

The integration is expected to unlock liquidity for stablecoins and large-cap assets, marking a significant step in the evolution of blockchain-based economies. David Schwartz, CTO of Ripple and co-creator of XRPL, envisions real-world asset tokenization as the driving force behind the blockchain economy, with applications ranging from real estate to commodities and treasuries. He anticipates an increasing adoption of tokenized RWAs as collateral for loans on traditional lending platforms.

Having been in existence for over a decade, XRPL witnessed an impressive 8.8% growth in daily activity volume in 2023, as reported by Messari. This surge was fueled by diverse transactions, including a substantial 73.7% increase in nonfungible token activity.

Axelar, a Canadian startup founded in 2020, specializes in providing communication overlays between blockchains, enabling data sharing without intermediaries. The company, initiated by Algorand team members and MIT graduates, aims to broaden blockchain adoption by facilitating RWAs.

Tokenization, the process of converting asset rights into digital tokens on a blockchain, has gained momentum. Investment bank Citi predicts that RWA tokenization could be the next “killer use case” in crypto, estimating the market to reach $4-5 trillion by 2030. This growth is expected to be led by the tokenization of private equity, real estate, and debt markets, with private equity emerging as the most tokenized asset class due to its liquidity and fractionalization advantages.

Image from walloftraders.com

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