Traditional finance (TradFi) companies have started to show interest in tokenizing financial assets on public blockchains, as the race to adopt blockchain technology for financial purposes intensifies.

During Paris Blockchain Week, Markus Infanger, the senior vice president of RippleX, told Cointelegraph that TradFi players are finally beginning to bring financial assets on-chain, aiming to deploy them for production and address issues in various value chains.

Infanger believes that TradFi's use of blockchain technology is becoming more tangible, marking a significant shift in the industry. Research suggests that the future value of tokenized markets could reach $16 trillion, which is eight times larger than the total market cap of the entire cryptocurrency sector.

Infanger also revealed that Ripple is in advanced discussions with several financial institutions, exploring tokenization projects to issue assets on the XRP Ledger. These firms have distribution channels in place and can articulate use cases and how they plan to use the underlying blockchain.

HSBC's partnership with Ripple-owned technology firm Metaco in November 2023, allowing institutional investors to hold tokenized securities on its new custody platform, is a prime example of this trend.

Ripple's business model is becoming more comprehensive, offering various solutions that utilize the XRP Ledger (XRPL). While Ripple is known for its blockchain-based payment solution, recent developments have broadened its appeal to both TradFi and decentralized finance (DeFi) players.

Ripple's recent announcement of its plans to issue a U.S. dollar stablecoin on XRPL and Ethereum will complement its offerings to institutions. The stablecoin market is expected to reach $2.8 trillion in five years, with a current market cap of $130 billion, leaving room for significant growth.

Infanger also highlighted the demand for a tier-one stablecoin offering like USD Coin (USDC) or Tether (USDT) from developers in the XRPL ecosystem. Ripple has used stablecoins in small-scale experimentation alongside XRP (XRP) and its payment product.

"We really envision our institutional DeFi use case on one hand, tokenization on XRPL and then in our payments product for optionality and some use cases alongside XRP using the stablecoin and for the XRP ecosystem as a whole," Infanger said.

Ripple has not yet confirmed the launch date or name of its stablecoin on XRPL and Ethereum.