In a groundbreaking move, San Francisco-based blockchain startup Ripple has announced the introduction of a tokenized version of US Treasury bills (T-bills) on the XRP Ledger via partnership with the tokenization platform OpenEden.
XRPL grabbing a piece of this trillion-dollar tokenization pie could mean trillions of dollars flowing into the crypto market, likely having a tremendous positive impact on XRP’s price.
Tokenized U.S. Treasuries Arrive On XRP Ledger
According to Ripple’s press release, the platform’s TBILL tokens are backed by short-dated T-bills and reverse repurchase agreements (repos) collateralized by US Treasuries.
News alert – tokenization platform @OpenEden_Labs is bringing tokenized US Treasury bills (T-bills) to the #XRPL! What’s more, Ripple is creating a fund to invest in tokenized T-bills, and will allocate USD$10M to OpenEden’s TBILL tokens as part of it. https://t.co/8GsG1Mk3ER
— RippleX (@RippleXDev) August 1, 2024
Minters of the tokens on the XRPL, a ledger built “to power institutional-grade financial use cases,” will be subject to Know Your Customer (KYC) and Anti-Money Laundering (AML) screening to ensure security and regulatory compliance.
Treasury bills are short-term debt obligations backed by the U.S. government. Tokenized versions of Treasury bills allow investors to diversify their portfolios. Over $1 billion worth of U.S. Treasuries are now tokenized on public blockchains, including Ethereum, Avalanche, Stellar, and Polygon.
The market for tokenized U.S. Treasury debt has been booming. On March 20, Bitcoin ETF giant BlackRock released its Ethereum-based tokenized fund BUIDL, backing it with U.S. Treasury bills, repo agreements, and cash. Research from Boston Consulting Group pins the future value of tokenized markets at $16 trillion by 2030 — which is roughly eight times bigger than the total market capitalization of the whole crypto sector.
Ripple has allocated $10 million to TBILL tokens issued by OpenEden. The senior vice president at RippleX, Markus Infanger, noted that these bills exemplify how real-world assets (RWAs) are being tokenized “to drive utility and new opportunities”.
“Institutions are increasingly looking at where to tokenize their real-world assets, and the arrival of T-bills on the XRPL powered by OpenEden reinforces the decentralized layer-1 blockchain,” Infanger said.
This strategic move could boost the utilization of Ripple’s ecosystem and eventually push the price of XRP toward the elusive $1 mark. The token was changing hands at $0.6023, down 7.4% in the past 24 hours amid a crypto market-wide bloodbath.
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