Ripple Labs is looking to revolutionize the real estate industry through tokenization. Antony Welfare, central bank digital currency (CBDC) adviser at Ripple, has shared his insights on how Ripple through its Ripple CBDC can conquer the $3.69 trillion real estate industry.
The Hong Kong Monetary Authority is looking at retail CBDC use cases, such as the equity release of tokenized real estate assets with Ripple’s new CBDC product. In tokenizing real estate, the pilot combines the hypothetical e-HKD, tokenized real estate, and finance lending protocols. If further allows users to tokenize real estate as collateral for loans. This is set to be one of the practical world use cases for CBDCs.
” #CBDCs are gaining traction globally and @Ripple CBDC team are focussing in on Real world use cases for a CBDC or #stablecoin. Last week I shared two real use cases at a CEE Fintech conference in Romania:#Tokenization is the Future of Real Estate
· The pilot combines the… pic.twitter.com/OMe1ieq8d1
— Antony Welfare (@AntonyWelfare) July 7, 2023 “
This innovation entails transforming tangible assets like real estate into digital forms. Tokenization would allow users to buy, sell, trade, and stake ownership of underlying ownership of real estate assets. According to a recent research report by Bernstein, tokenization is highlighted as a promising prospect, offering a remarkable $5 trillion opportunity within the next five years. The report speculates that approximately $3 trillion, equivalent to around 2 percent of the global money supply, will undergo tokenization during this period.
Although the real estate market is one of the largest in the world, it faces several challenges that blockchain technology can resolve. Using Ripple, the XRP Ledger can improve liquidity, efficiency, security, broader market reach, and transparent transactions. Furthermore, Ripple’s CBDC Platform would provide a secure, private, permissioned ledger.
However, as detailed in the Bernstein Report, there are still challenges to tokenization. For starters, there’s existing regulatory ambiguity surrounding tokenization. The report emphasizes the crucial need for policymakers to grasp the advantages of blockchain technology and introduce a regulatory framework for their adoption and integration into traditional markets.
Ripple in particular is facing a legal battle with the SEC for its issuance of XRP tokens. The SEC alleges that the tokens were offered as unregistered securities. This has led to a 2-year legal battle that has continuously hindered the development and adoption of Ripple. Experts are optimistic that the case will come to an end soon with Ripple winning the case.
At the time of press, XRP is exchanging for $0.47 after a marginal negative change of less than 3 percent in the last 7 days. Analysts expect a win for Ripple to drive XRP to its all-time high.
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