Ripple Labs exploring real-world use cases of CBDCs and stablecoins

The company has proposed a system to tokenize real estate assets and use them as collateral for loans.

Ripple Labs exploring real-world use cases of CBDCs and stablecoins
Design by Ifeoluwa Awowoye for Mariblock. 

Ripple Labs, a blockchain solutions company, is working on real-world applications of CBDCs and stablecoins in the real estate sector. Antony Welfare, Ripple's CBDC advisor, shared the concept reflecting this stance on social media on July 7.

The details 

  • He highlighted a revolutionary system that brings together tokenized real estate assets, Hong Kong's pilot CBDC (e-HKD), and finance lending protocols to transform the real estate sector. 
  • The system would allow users to tokenize their real estate assets and use them as collateral for loans on Ripple’s CBDC platform. 
  • Welfare believes that tokenization holds the key to the future of real estate and the company’s real estate tokenization pilot would accelerate the use of equity as collateral in the sector. 

Key quote 

  • Welfare tweeted: 
“CBDCs are gaining traction globally and Ripple’s CBDC team are focusing on real-world use cases for a CBDC or stablecoin...The pilot combines the Hypothetical e-HKD, tokenized real estate and finance lending protocols. [The system] allows users to tokenize real estate as collateral for loans. The solution will leverage Ripple’s CBDC Platform – a secure, private, permissioned ledger.” 

Be smart 

  • Tokenization transforms ownership of a real-world asset into a digital token. The token becomes a digital representation of the asset and can be used to transfer the ownership and rights of the asset. 
  • In Ripple’s system, real estate assets would be represented digitally with the hypothetical e-HKD on Ripple’s platform which is a private and permissioned ledger. 

Zoom out 

  • The concept of tokenization is not new to Africa. Some governments have embraced the idea, and international tokenization companies have expanded operations to the continent.  
  • The Central African Republic has tokenized its natural resources, such as diamonds and gold, in an effort to increase transparency and efficiency in the mining sector. 
  • United States-based RedSwan, a real estate tokenization company, opened in Nigeria nearly one and a half years ago.  
  • RedSwan allows investors to purchase fractions of real estate assets as crypto tokens. The tokens are tradeable on RedSwan’s exchange. 
  • The Bank of International Settlement (BIS), a consortium of 63 central banks, recently said that tokenization is the future of global finance. It added that CBDCs represent an ideal foundation for tokenizing money and other assets on a unified ledger.