Uphold Exec Validates XRP Ledger Token Standard, Names Major Upside

XRP Ledger’s (XRPL) activation of a new feature, the Multi-Purpose Token (MPT) Standard, has been applauded for solving regulatory compliance issues. Martin Hiesboeck, Uphold Head of Research, gave the commendation in a post on X to highlight some key features of the MPT.

Why XRPL’s MPT standard is game-changer

Notably, the new token standard will allow financial institutions such as banks and asset managers to issue fungible tokens. With the new feature, banks can issue stablecoins, bonds or tokenized real-world assets directly on XRPL.

This XRPL feature is seamless in that the features are coded into the protocol. It is different from what obtains with Ethereum, which requires custom smart contracts that can be expensive and risky. In essence, XRPL’s MPT is institution-ready because of its design.

It allows financial institutions to freeze tokens and comply with sanctions. The banks can also reverse fraudulent transactions, while the know-your-customer (KYC) feature ensures that only approved investors can hold certain tokens. This aligns with the procedures of traditional financial institutions.

A major appeal of the XRPL MPT is that the barrier of compliance risk and operational complexity has been eliminated. The MPT tokens can integrate with financial standards and store contract data like maturity dates, while making them usable in real banking systems.

It is worth emphasizing that the MPT directly increases XRP’s utility. Primarily, every transaction requires payment of gas fees in XRP, which are burned to reduce the supply. Such an action could drive up the value and increase the price of the asset.

Additionally, to issue new MPT, reserves of XRP are required, which are locked up, further reducing the liquidity supply and potentially increasing the value.

Hiesboeck believes that massive gains would occur if trillions of real-world assets were to move to XRPL, as the transaction volume and burning of XRP could create a staggering demand for XRP. This would move XRP from just a speculative asset to an actual financial utility in the traditional space.

Positioning XRP for $10-16 trillion RWA market

Martin Hiesboeck argued that XRPL is now positioned as the go-to blockchain for tokenized real-world assets.

Interestingly, the RWA sector has been projected to hit a market cap of between $10 and 16 trillion by 2030. The current move places XRPL in a good position, with the necessary structure to capture a good slice of it.

Meanwhile, XRP could become the utility currency for this sphere of regulated global finance. As of press time, XRP is changing hands at $3.05, a 2.23% increase in the last 24 hours.