Cryptoliquidity and the future of tokenization

As in any industry, crypto’s growth will never be “up and to the right” all the time. To persevere through challenging times, it is important to maintain a consistent long-term vision while focusing on controllable short-term inputs.

As Ripple’s Senior Director of Engineering, it was important to me to get this message across during my fireside chat with The Block’s Managing Editor Nathan Crooks at Quantum Miami 2023.

I returned to that chorus again and again to address crypto’s tough second half of 2022, Ripple’s continued growth, the launch of Liquidity Hub, and the future of tokenization.

Ripple’s Vision for Utility

For Ripple, the long-term vision is utility. That is why, despite a difficult end to the year for most of the industry, we continued to grow and expand our network of partners and customers worldwide.

By focusing on real-world opportunities such as ease of use and interoperability, the company has been able to make steady progress toward its goal of achieving lasting enterprise use cases for blockchain and digital assets.

Last year was a pivotal moment in the industry as blockchain and crypto solutions moved into the mainstream. When the water got choppy in years past, maybe only a few friends would call. But now, with increased visibility, even my parents check in.

Launch of Liquidity Hub

An important result of this focus and progress was Ripple’s launch of Liquidity Hub. Liquidity Hub is designed to more easily and efficiently source digital assets from the broader crypto market at optimized prices, and supports businesses offering crypto payments or solutions.

My team is specifically responsible for building and maintaining the Liquidity Hub solution. I have been with Ripple for more than six years and have seen our cross-border payment solution evolve to reach more than 40 payment corridors and process millions of transactions and billions of dollars in volume.

This experience and development helped highlight the urgent need for greater crypto-liquidity among Ripple customers and sparked the idea of ​​a simple, seamless way for businesses to access this liquidity.

The multi-year journey – from the first dollar through historical milestones and finally to the launch of Liquidity Hub – continues today as we roll out more broadly and as the team invests in and works on additional functionality such as improved crypto on/off ramps ( for example, the ability to exchange crypto for fiat).

Future of Tokenization

Liquidity Hub is an important part of delivering on the future of tokenization. As I highlighted in the fireside chat, there are many different types of tokens: native, peerless tokens like bitcoin; protocol tokens; Central Bank Digital Currencies (CBDCs); and even real assets such as stocks, real estate and carbon credits that have been tokenized.

While we’re still not quite there yet when it comes to normalizing something like buying and selling a house on a blockchain, carbon credits are a promising use case that excites myself and the Ripple team.

Carbon credits today are extremely fragmented, difficult to verify and difficult to price, making them expensive to use. We think getting them on the blockchain helps solve some of these problems.

Many of the basics – or primitives – required to make the real-world on-chain connection already exist today. This includes knowing how blockchains work, understanding how to enforce rules for decentralized transactions and how to issue and represent tokens on the chain.

I’ve used the analogy of being in the kitchen with premium ingredients but not having the exact recipe to hand – a scenario where Ripple thrives. To help make the recipe for tokenization clearer, Ripple is focused on two things we hear most often from customers: interoperability and ease of use.

Crypto-native customers need help managing fiat, while on the flip side, traditional customers need help understanding and engaging with crypto. Ripple helps build necessary on/ramps through solutions like Liquidity Hub that will make each available to the other.

At the same time, my team is determined to make the “back-of-the-kitchen work” less obvious and burdensome for business customers. Creating solutions that emphasize ease of use and avoid “build for builders” will enable non-crypto business customers to operate more comfortably and securely in the crypto world.

Outside the industry, regulatory clarity is essential because clear regulation breeds innovation and ground-breaking solutions. While regulatory efforts have stalled in the US, we’ve seen the UK, Europe, Japan and Singapore step in to fill the void. I strongly believe that a lack of common sense regulation is a competitive risk for the US.

I hope policymakers can channel our collective experience with the early Internet—when the web’s regulatory framework encouraged dynamism and allowed innovation to flourish—to unleash crypto innovation here in the United States.

While greater regulatory clarity in the coming months may unlock more innovation, I understand that the more realistic path to increased mainstream adoption will simply be to get more assets on-chain.

For Ripple, the future is clear. The company’s continued focus on long-term sustainability and commitment to utility will serve as a guiding light in carving out an integral part of the unfolding tokenized future – one that I know is inevitable.

Check out the full conversation and learn more about crypto sourcing and crypto liquidity.