XRP Ledger Positioned as Foundation for Institutional DeFi, Says Ripple CTO David Schwartz

• Ripple CTO David Schwartz believes DeFi will take a significant share of traditional finance in the coming years.
• Tokenized assets and on-chain credit are central to bridging TradFi with decentralized systems.
• Institutional adoption and blockchain neutrality can work together to expand financial innovation.

RippleX recently opened the first episode of its Onchain Economy series with Ripple’s Chief Technology Officer, David Schwartz, who is also known as one of the co-creators of the XRP Ledger.

In his remarks, Schwartz stressed that financial technology is evolving at a rapid pace, and blockchain stands at the center of this transformation.

He noted that large corporations, including companies like Amazon and Uber, demand more efficient and tailored financial services than the current banking system can provide. This rising demand, he explained, is why blockchain-based systems are well-positioned to deliver practical solutions.

Schwartz emphasized that decentralized finance, or DeFi, has the potential to take a significant portion of the traditional finance market over the next several years.

However, he underlined that the blockchain sector cannot remain focused only on speculative assets or collectibles. Instead, it must create real-world financial products that meet the expectations of both businesses and consumers.

XRP Ledger Built for Tokenized Assets

Schwartz is of the opinion that tokenization will help close the gap between traditional finance and DeFi. Traditional assets such as real estate portfolios, loans, and even real assets are being developed as blockchain-based products.

Tokenizing these assets allows institutions to unlock liquidity, generate efficiency, and provide new investor opportunities.

He mentioned that the XRP Ledger was actually created specifically for such applications. In its speed, scalability, and reliability, it provides a basis for tokenized assets and credit.

These technologies, according to him, will form the foundation of an inclusive financial system. Decentralized platforms paired with an institution’s resources could bring about an equitable system whereby both parties profit.

Debate Over Institutional Adoption and Decentralization

One of the major concerns that is expressed in the debate over institutional adoption is that institutional adoption is harmful to decentralization. Schwartz argued the opposite.

He noted that more institutions are getting attracted towards layer one blockchain because of its open structure and neutrality. Decentralized blockchains offer a level playing ground as opposed to conventional systems that tend to favor a few players.

For institutions, neutrality is a pro and not a con. It enables them to use networks while being assured of neither bias nor central control; hence the preference for decentralized platforms at the end of the day.

Schwartz’s analysis made him confident that such a phenomenon will continue to drive phenomenal growth throughout the blockchain ecosystem, with institutional DeFi being a part of the financial system’s tomorrow.

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