Ripple CEO Outlines How Blockchains Like XRPL Can Transform Real Estate

Ripple CEO Brad Garlinghouse discusses the transformative potential of blockchain networks such as the XRPL in the real estate industry, highlighting cost efficiencies.­

The XRP community recently highlighted a thought-provoking conversation the Ripple CEO Brad Garlinghouse had during a DC Fintech Week’s discussion on a digital economy, specifically about blockchain technology’s future beyond the securities law realm.

🏡🏡🏡🏡
“I know shit all about this 😎 …Settlement of transactions for the real estate industry; the costs involved, the title insurance…it’s crazy how much it costs. There’s a very cool company called @PropyInc, which is relatively small right now, trying to basically… https://t.co/WL6NHXUsjk

— Cowboy.Crypto ☀️ (@cowboycrypto313) July 9, 2023

When asked about other sectors with untapped potential or overlooked risks, Garlinghouse’s response shed light on the transformative possibilities within the real estate industry.

Garlinghouse began by acknowledging the regulatory landscape’s evolution and emphasized that Ripple, as a crypto company, continuously considers various factors and obligations across the financial services spectrum, highlighting an intriguing use case unrelated to Ripple’s current endeavors.

Blockchain in Real Estate

Drawing attention to a small but fascinating company, Garlinghouse discussed the challenges associated with real estate transactions. Specifically, he delved into the exorbitant costs and complexities surrounding settlement and title insurance within the industry. 

“Settlement transactions for the real estate industry […] the cost involved, the title insurance – it’s crazy how much it costs,” Garlinghouse remarked.

He pointed out a noteworthy player named Propy, whose ambition is to tokenize real estate transactions and enable fractional ownership. Garlinghouse found this area particularly captivating, as he observed a glaring discrepancy between the traditional processes in real estate and the efficiencies offered by modern technology.

Garlinghouse emphasized that blockchain’s allure lies in its ability to facilitate transactions between parties without explicit trust. 

Rather than relying on a central counterparty, such as a correspondent bank in cross-border payments (an area where Ripple primarily focuses), he pinpointed the real estate industry’s reliance on a central counterparty for trust, often manifesting as title insurance and other intermediaries. 

Any industry relying on a central counterparty, extracting tolls and hindering transaction speed, is susceptible to disruption through blockchain technology, according to Garlinghouse.

Tokenization Is The Future of Real Estate

In a more recent statement, as The Crypto Basic disclosed, Ripple CBDC Advisor Antony Welfare underscored the growing momentum of Central Bank Digital Currencies (CBDCs) worldwide, particularly in the real estate sector. 

Welfare highlighted tokenization as the future of real estate, sharing an example involving the hypothetical e-HKD, tokenized real estate, and finance lending protocols. 

According to the Ripple CBDC Advisor, this pilot program aims to enable users to utilize tokenized real estate as collateral for loans, leveraging Ripple’s secure, private, and permissioned ledger CBDC platform.

Notably, the discussion around blockchain in real estate has been on for a while. As The Crypto Basic reported in 2022, Ripple collaborated with a real estate firm in Portugal to overhaul the sector.