XRPL's Low Fees and Integration Are Catalysts for RWA Tokenization

The XRP Ledger is poised for a significant transformation as it readies itself to become a cornerstone in the realm of tokenized real-world assets (RWA).

XRP Ledger, one of the pioneering blockchains and the native platform of the XRP cryptocurrency, is gearing up to play a pivotal role in the world of tokenized real-world assets (RWA). In an exciting development, Ripple's Chief Technology Officer, David Schwartz, has outlined a potential timeline for RWA projects to make their debut on the XRPL mainnet, underscoring the platform's unique advantages. With low transaction fees and seamless integration with on-chain exchange mechanisms, the XRPL is poised to offer users a cost-effective and efficient solution for buying, selling, storing, and transferring real-world assets without dependence on traditional fiat currencies.

Meanwhile, in a surprising twist, the United States Securities and Exchange Commission (SEC) has opted not to pursue an appeal following a recent court ruling related to Grayscale's Bitcoin spot ETF filing. This decision, as reported by Reuters and confirmed by sources close to the matter, carries substantial implications for the cryptocurrency industry.

Ripple CTO Expects Tokenized Real-World Assets on XRPL in 2024-2025

XRP Ledger, the pioneering blockchain platform associated with the XRP cryptocurrency, is poised to become a key player in the tokenization of real-world assets (RWA), according to Ripple's Chief Technology Officer, David Schwartz. In a recent video shared by the Flip The Chain team on 13 October 2023, Schwartz expressed optimism about the XRPL's potential for RWA tokenization, estimating that these projects could go live in the next year or year and a half.

Schwartz highlighted several factors that make XRP Ledger an ideal platform for RWA tokenization. One of the key advantages is its low transactional fees, which offer a cost-effective solution for tokenization protocols and market participants. Additionally, the XRPL boasts seamless integration with on-chain exchange mechanisms, providing a frictionless experience for users engaging with real-world assets.

Eliminating Fiat Dependency

The Ripple CTO emphasized the importance of allowing users to buy, sell, store, and transfer real-world assets without depending on traditional fiat currencies like the U.S. dollar. XRPL's decentralized exchanges (DEXes) are expected to play a pivotal role in providing the required level of accessibility and convenience for all participants in the market.

Estimated Timeline for RWA Projects

Given these favorable conditions, the first viable RWA tokenization protocols on XRP Ledger could become operational as early as 2024 or in the early months of 2025. Enthusiastic members of the cryptocurrency community on Twitter have speculated that assets such as gold and real estate might be among the first to have their virtual representations running on the XRPL.

XRPL AMM Proposal and Community Support

However, the XRPL community is currently awaiting the verdict from validators regarding the activation of the XLS-30d proposal, commonly referred to as "XRPL AMM." If approved, this proposal would introduce seamless non-custodial exchange functionality to the XRP Ledger, potentially transforming it into a DeFi (Decentralized Finance) blockchain.

Limited Support for XRPL AMM and Clawback Proposals

At press time, only two validators—Ripple itself and katczynski.net—have voiced their support for the inclusion of the XRPL AMM proposal into the Ripple v1.12.0 release. The proposal requires 26 out of 33 votes to pass, but it has secured only 3.03% of the necessary voting power.

Ongoing Evolution of XRPL

In addition to the XRPL AMM proposal, another significant amendment, "Clawback," which is considered crucial for the XRPL to remain regulatory compliant, has received 15.5% support, with five "yays" from validators. Both proposals reflect the ongoing evolution of the XRP Ledger as it seeks to accommodate the growing demand for tokenized real-world assets in the blockchain ecosystem.

SEC Declines Appeal in Grayscale's Bitcoin ETF Case

In related news, the United States Securities and Exchange Commission (SEC) has decided not to pursue an appeal following a recent court ruling related to Grayscale's Bitcoin spot ETF filing. Multiple sources close to the matter have confirmed this development, shedding light on what could be a pivotal moment in the cryptocurrency world.

A Court Rebuke to the SEC

Back in August of this year, a federal court delivered a resounding rebuke to the SEC, declaring that the regulatory body erred in summarily dismissing Grayscale's filing without due consideration. The court mandated the SEC to reevaluate the submission in accordance with Grayscale's expectations. The SEC had until midnight this past Friday to announce its decision, which it ultimately did not.

This non-action by the SEC is now fueling speculation that Grayscale may soon embark on negotiations to convert its Bitcoin Trust into a full-fledged Bitcoin spot ETF.

Broader Implications for the Cryptocurrency Industry

Beyond Grayscale, the SEC currently has a slate of similar filings pending from some of the world's largest fund managers, including BlackRock, Invesco, Fidelity, and Ark Invest, among others. The regulator has delayed a decision on Cathie Wood's company's filing, but other companies with pending submissions are scheduled to hear back in 2024, starting as early as March next year.

At the forefront of this queue is BlackRock, a financial giant eager to launch a Bitcoin spot ETF into the market. The SEC's stance on Grayscale's case sets a precedent for how it may approach other applications for cryptocurrency-based ETFs.

Ripple Advocate Weighs In

Jeremy Hogan, a prominent advocate for Ripple (XRP), expressed his views on this unexpected turn of events via X (formerly Twitter). While he acknowledged that the launch of a Bitcoin spot ETF could attract substantial investments, he cautioned, "Whatever remained pure and true about Bitcoin will soon be gone."

Hogan did not elaborate on his statement, but it is plausible that he was referring to Satoshi Nakamoto's original vision for Bitcoin as a decentralized digital currency. This vision, it seems, may be overshadowed by the transformation of Bitcoin into just another financial instrument catering to Wall Street interests.

Implications for Cryptocurrencies

It is worth noting that Satoshi Nakamoto created Bitcoin in the wake of the 2008-2009 mortgage crisis with the intention of offering an alternative to traditional centralized currencies. However, the cryptocurrency landscape has evolved significantly since then, with Wall Street firms like BlackRock and Fidelity showing more interest in investment opportunities rather than the decentralized ideals that underpin cryptocurrencies.

Ripple and XRP's Ongoing Battle with the SEC

The SEC's decision regarding Grayscale's ETF filing has sparked questions within the cryptocurrency community. Notably, the SEC has opted not to appeal the Grayscale case while persisting in its legal battles against Ripple and XRP.

SEC Chair Gary Gensler maintains that Bitcoin is the only commodity in the cryptocurrency market, asserting that other cryptocurrencies resemble unregistered securities due to the involvement of development teams and investor expectations of future profits from these assets.

As the cryptocurrency landscape continues to evolve, the SEC's decisions will play a pivotal role in shaping the industry's future. The acceptance of a Bitcoin spot ETF and the ongoing Ripple case are just two examples of how regulatory actions are influencing the cryptocurrency space.

Price Overview

XRP was one of the many cryptocurrencies that started the new week in the green. At press time, data from the cryptocurrency price tracking website CoinStats indicated that the remittance token had achieved a 24-hour gain of 0.22%. Subsequently, the altcoin was changing hands at $0.486878.

Price chart for XRP (Source: CoinStats)

Despite the recent increase in price, XRP was still in the red zone on the longer time frames. CoinStats indicated that XRP’s weekly performance stood at around -6.18%. Meanwhile, the cryptocurrency’s value had dropped 3% over the past 30 days as well.