Alex Carchidi, The Motley Fool
5 min read
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Real-world assets are increasingly being tracked on blockchains.
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XRP has a lot of features that asset managers need to do that gracefully.
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Competitors could still make hitting $10 pretty difficult in the near term.
Picture a dusty boomtown at dawn. The first crews that pour the sidewalks decide where every storefront door will sit for decades. In crypto's next boomtown, real-world-asset (RWA) tokenization, the pavement is still wet. The chain that's viewed as an attractive place to pour the concrete could collect tolls long after the cement hardens.
That is exactly the bet behind XRP (CRYPTO: XRP). If XRP winds up hosting a meaningful share of tokenized stocks, bonds, and other RWAs, that dream nudges toward higher-probability territory. The coin's price could rise beyond $10 as a result over the long term.
Here's how this trend could play out to the favor of holders.
First, let's clarify our terms.
Tokenization is the process by which the record of an asset's ownership is stored on a blockchain as a transferable crypto token. The "real-world" label is a big bucket that contains anything from U.S. Treasuries and corporate bonds to real estate deeds, private-equity shares, fine art, or even bales of hay.
The addressable pie is vast, to say the least.
On June 9, real-world assets tracked on blockchains totaled about $23.2 billion. Boston Consulting Group (BCG) thinks that figure could swell to around $16 trillion by 2030 as illiquid assets migrate to blockchains for cheaper settlement and 24-hour liquidity, not to mention the possibility of better price discovery. Even a modest cut of that pie could move token prices noticeably, and XRP is very likely to be able to grab a slice of the action.
While competitors in the tokenization space, like Ethereum (CRYPTO: ETH), rely on external smart contract stacks for know-your-customer (KYC) and anti-money-laundering (AML) checks to ensure regulatory compliance, the XRP Ledger bakes critical controls into its base layer. That's the primary reason the chain should outperform others in this area long-term.
With XRP's ledger, asset issuers can blacklist rogue addresses, freeze assets, or invoke a lockdown of entire pools -- these are features designed to meet the demands of highly regulated money managers of the world's largest institutional investors. These capabilities are set to be expanded on by forthcoming upgrades to the chain, including by adding a native identity layer for institutions that will simplify their tracking of on-chain user accounts.
