David Schwartz, Ripple's Chief Technology Officer, recently shared his thoughts on the company's new roadmap, which aims to bring large institutions into the DeFi ecosystem. Schwartz discussed this topic during a podcast at the ongoing 2024 Consensus conference hosted by CoinDesk ¹.

*Ripple's Institutional-Focused Roadmap*

The strategy involves enabling institutions to create highly regulated financial products, such as traditional loan portfolios, which 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 this debt, allowing it to be traded within a DeFi system ¹.

*Institutional Adoption as a Stepping Stone*

Schwartz suggested that it is now an accepted fact that institutional adoption is a stepping stone to grassroots adoption. However, he admitted that Ripple’s initial move in that direction was premature. Per his admission, when institutions adopted Ripple’s payment technology, such as using XRP for transactions, the end users remained unaware of the blockchain involvement ¹.

*Regulation and Decentralization*

Schwartz addressed skepticism about regulation. He explained that it is possible to have thoroughly regulated assets like stablecoins, loan portfolios, or tokenized securities. These assets can undergo rigorous KYC and AML processes for every customer, while the underlying tokens representing ownership or collateral can remain completely decentralized ¹.

*Four Key Areas for Development*

Schwartz outlined four key areas he eagerly anticipates developments in, including regulatory clarity, resolution of Ripple’s legal battle with the SEC, advancements in blockchain scalability, and increased institutional crypto adoption ².

*Blockchain Scalability Solutions*

Schwartz mentioned developers’ challenges in innovating at the blockchain layer and proposed solutions such as sidechains and zero-knowledge proofs to address these issues. These technologies, according to David Schwartz, have the potential to significantly enhance scalability and innovation directly at the blockchain’s foundational level ².

*Fostering Ecosystem Growth*

Schwartz also emphasized attracting more individuals and institutions into the crypto ecosystem. He suggested that creating compelling user experiences, such as offering access to tokenized securities and collateralized lending, could significantly increase public interest in cryptocurrency ².

*Clawback Feature*

Schwartz shared some insights into the new Clawback feature on the XRPL. The "clawback" amendment is eligible for voting. This allows issuers of new assets specifically created with this feature enabled to claw back a specified quantity of the asset from a holder ³.