A recent working paper from a Hong Kong-based monetary and financial research institution lists Ripple and its native asset XRP as a representative case of tokenized finance. The paper argues that directly embedding native digital assets into financial networks has the potential to improve payment efficiency, enhance liquidity management, and reduce capital tied up in cross-border settlements.
The paper focuses on token embedding
This paper, authored by researchers Lin William Cong and Zhiheng He, discusses the "token embedding" model. According to the paper's definition, digital platforms directly integrate native tokens into their ecosystem for use in trading, clearing, and liquidity support, thereby reducing operational friction.
The author argues that this type of model is becoming a key characteristic of the tokenized economy. Native assets are no longer just tradable objects, but also serve actual functions in the operation of the network.
XRP was listed as a cross-border payment case.
The paper mentions several blockchain projects, including Ripple, OmiseGo, and Ethereum. The discussion focuses more on Ripple's payment infrastructure and XRP, particularly its use as a "bridging asset" for cross-border transfers.
The article points out that traditional international payments typically rely on correspondent banking networks and pre-deposited funds in different jurisdictions. This model often results in higher costs, longer settlement times, and a significant amount of capital tied up.
In contrast, Ripple provides on-demand liquidity through XRP, allowing institutions to transfer value between different currencies without having to maintain large reserves in multiple locations for extended periods.
The paper claims it can improve liquidity management.
Researchers believe that payment and settlement networks using XRP may be more efficient than traditional methods. Its near real-time settlement capabilities could help reduce intermediaries, lower transaction costs, and reduce friction in global value transfers.
The paper also emphasizes the broader financial implications, namely that by embedding native tokens into infrastructure, financial institutions can reduce idle capital, improve the efficiency of capital utilization, and make settlement processes faster and more flexible.
From this perspective, the paper does not only regard XRP as a transactional crypto asset, but rather as a case study of native tokens that can perform practical functions in financial networks.
Competition intensifies in RWA
This research comes as the competition surrounding the tokenization of real-world assets continues to intensify. Banks, governments, and various financial institutions are continuously testing blockchain-based digital asset and payment solutions.
Against this backdrop, XRP's inclusion in discussions by Hong Kong research institutions has brought it back into the spotlight regarding financial infrastructure and RWA tokenization. Meanwhile, the XRP Ledger has also recently gained more attention in the area of on-chaining real-world assets.
