Ripple’s $1.25 billion acquisition of prime broker Hidden Road is a “defining moment” for the blockchain payments company, potentially unlocking more use cases for the XRP Ledger among institutions, said David Schwartz, Ripple’s chief technology officer. 

“Ripple’s acquisition of Hidden Road is a defining moment for the XRP Ledger and XRP,” Schwartz said on social media on April 8. 

Hidden Road is a prime brokerage and credit network with more than 300 institutional customers. On a typical day, it clears more than $10 billion and processes more than 50 million transactions across traditional rails. 

“Now imagine even a portion of that activity on the XRP Ledger — and that’s exactly what Hidden Road plans on doing — not to mention future use of collateral and real-world assets tokenized on the XRPL,” said Schwartz. 

Source: Ripple

Ripple has long touted the XRP Ledger as a scalable platform for real-world assets (RWAs), having partnered with crypto exchange Archax to launch a tokenized money market fund in November. 

However, until now, tokenization on the XRP Ledger has been minimal. Industry data tracks only two RWAs on the XRP Ledger valued at roughly $50 million. 

The XRP Ledger has yet to take off as a tokenization platform. Source: RWA.xyz

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RWA market continues to scale

The value of onchain RWAs has grown by 9.2% over the past 30 days, bucking a general downtrend in the cryptocurrency market tied to global growth fears and tighter financial conditions. Over that period, the number of asset holders increased by 6.2%, according to RWA.xyz. 

Analysts across the traditional finance industry expect tokenized RWAs to become a multi-trillion-dollar market by 2030 due to large addressable markets across bonds, commodities, equities, real estate and the M2 money supply. 

According to various estimates, the value of tokenized securities could reach at least $2 trillion by 2030. Source: Tokenized Asset Coalition

Some of the world’s largest companies are already experimenting with asset tokenization, with CME Group and Google recently partnering to explore how the Google Cloud Universal Ledger could improve capital market efficiency. 

Prometheum CEO Aaron Kaplan recently told Cointelegraph that regulatory conditions in the United States are ripe for tokenization to really take off. The biggest gap to adoption is a lack of secondary markets for buying and selling tokenized assets. However, this could soon change as crypto-native companies and traditional brokerages compete for market share.

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