Friday, 14 June 2024

Ripple and Fubon Bank to showcase real estate asset tokenisation use case

5 min read

Ripple, one of the leaders in enterprise blockchain and crypto solutions has been selected to showcase a real-estate asset tokenisation solution, as part of the Hong Kong Monetary Authority’s (HKMA) inaugural e-HKD Pilot Programme.

The HKMA has adopted a three-rail approach to prepare for the possible rollouts of the e-HKD. As a leading provider offering real-world asset tokenisation capabilities, Ripple alongside its partner Fubon Bank (Hong Kong) – a wholly owned subsidiary of Fubon Financial Holding, one of the largest financial holding companies in Taiwan – will demonstrate its use case under e-HKD Pilot Programme, which will focus on real estate asset tokenisation and equity release leveraging the e-HKD. e-HKD Pilot Programme will see a series of pilots conducted with various industry players to gain in-depth research into application, implementation, and design issues related to the e-HKD.

With real-world asset tokenisation predicted to be a multi-trillion-dollar industry by 2030, tokenising commodities such as real estate is gaining traction within the financial services and government sectors as a core use case. Ripple’s innovative use case combining the e-HKD, tokenised real estate, and lending protocols will run on a private and secure ledger, built with the same technology as the XRP Ledger (XRPL). The XRPL is an open-source, energy-efficient and decentralised blockchain that has been continuously operating for over 10 years.

For most people, their home becomes one of the main assets in their total wealth portfolio with the possibility of increasing in value over time. However, unlocking this increase in equity has considerable friction. The process can be costly, lengthy, and cumbersome. By leveraging the power of blockchain technologies, such as the XRPL and Ripple’s central bank digital currency (CBDC) platform, Hong Kong citizens can experience the release of equity faster and more efficiently. Commercial banks can also expect to benefit from higher velocity of loan throughput and more flexible payments.

James Wallis, vice president of central bank engagements and CBDCs at Ripple said: “The Asia Pacific region has many forward-looking regulators such as the HKMA, who are looking to leverage the capabilities of blockchain technology. Ripple is one of the select few organisations participating in the HKMA’s e-HKD Pilot Programme. We now have the opportunity to demonstrate how real estate asset tokenisation could be brought to the citizens of Hong Kong, and are confident that our fully integrated solution will be an industry-first use case demonstrating the power of leveraging a CBDC for real estate equity asset release.”

As part of the inaugural e-HKD Rail 2 Pilot Programme, Ripple executives attended the commencement event on May 18th hosted by Eddie Yue, CEO of the HKMA.

Re-disseminated by The Asian Banker

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