David Schwartz Discusses Ripple’s Roadmap To Bring Large Institutions Into DeFi

David Schwartz, Chief Technology Officer at Ripple, shares new information on the company’s recently announced roadmap, which focuses on integrating large institutions into DeFi.

Schwartz commented on this topic in a podcast during the ongoing 2024 edition of CoinDesk’s Consensus conference.

Importance of Ripple’s Institution-Focused Roadmap

He explained that the strategy involves allowing institutions to create highly regulated financial products, such as traditional loan wallets, that can interact with DeFi ecosystems.

Schwartz illustrated this concept with the example of a regulated financial entity issuing conventional loans for real estate or business, followed by the tokenization of that debt, allowing it to be traded within a DeFi system.

Highlighting the importance of institutions in the mass adoption of crypto, the Ripple executive drew parallels with the evolution of the internet. He pointed out that the Internet benefited from its initial use by the government and the military.

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According to Schwartz, this decision led to widespread adoption by the population. He used this analogy to emphasize that such a synergistic approach is what leads to the domination and expansion of a system.

In this context, the CTO of Ripple highlighted the XRP ledger as a blockchain platform well suited for these types of applications.

Institutions are now bringing their users to crypto

Furthermore, Schwartz suggested that it is now accepted that institutional adoption is a stepping stone to popular adoption. However, he admitted that Ripple’s initial move in this direction was premature.

According to him, when institutions adopted Ripple’s payment technology, such as use XRP for transactions, end users were unaware of the blockchain involvement. Essentially, banks using Ripple technology have not brought their customers into the blockchain space.

As for whether the crypto space has now adopted Ripple’s strategy of targeting institutions to drive mass adoption, Schwartz pointed to stablecoins like USDT as undeniable proof. He noted that stablecoins are as institutional as possible, but they power completely decentralized economies.

At the same time, Schwartz said he is excited about the current trend of institutions not only adopting blockchain technology, but also bringing their customers onto the blockchain or enabling blockchain-based activities.

Regarding the regulations

Additionally, Schwartz responded to skepticism regarding regulation. He explained that it is possible to have carefully regulated assets like stablecoins, loan wallets or tokenized securities.

These assets can be subject to rigorous KYC and AML processes for each client, while the underlying tokens representing ownership or collateral can remain completely decentralized.

Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinions of The Crypto Basic. Readers are encouraged to conduct thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.

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