A recent working paper by the Hong Kong Monetary and Financial Research Institute listed Ripple and its primary asset XRP as one of the representative cases of monetization finance. It was argued that the direct embedding of raw digital assets into the financial network was expected to increase the efficiency of payments, improve liquidity movements and reduce the use of funds in cross-border settlements.
Thesis focused on the embedding of a token
The paper, written by researchers Lin William Cong and Zhiheng He, discussed the “Dialin Embedding” model. According to the paper definition, the digital platform directly integrates the original currency into its own ecology for trade, liquidation and liquidity support, thereby reducing operational friction.
According to the authors, such models are becoming an important feature of the monetization economy. Original assets are no longer merely tradable, but also perform actual functions in the operation of the network.
XRP classified as cross-border payment
The paper referred to several block chain projects, including Ripple, OmiseGo and Ether. Discussions on Ripple's payment infrastructure and XRP were more focused, especially as it was used for cross-border transfers of “bridge assets”.
According to the article, traditional international payments often rely on a network of correspondent banks and pre-position funds in different jurisdictions. This pattern often entails higher costs, longer settlement times and significant capital costs.
By contrast, Ripple ' s approach is to provide on-demand liquidity through XRP to allow institutions to transfer value between different currencies without the need to maintain large multi-field provisions over time.
Thesis stated that liquidity management could be improved
Researchers believe that the use of XRP payment and settlement networks may be more efficient than traditional paths. Its near real-time settlement capacity helps to reduce intermediaries, reduce transaction costs and reduce friction in the transfer of global values.
The paper also highlighted the broader financial significance of the fact that by embedding in infrastructure, financial institutions could reduce idle capital, increase efficiency in the use of funds and make settlement processes faster and more flexible.
From this perspective, the paper does not view XRP only as a transaction-type encrypted asset, but rather as an original currency case in a financial network that can actually function.
RWA competition continues to rise.
At the time of the publication of the study, competition for the monetization of real world assets was still on the rise. Banks, Governments and various financial institutions are continuously testing digital asset and payment programmes based on block chains.
In this context, the XRP has been included in the discussions of the Hong Kong Institute of Research and Research and has re-engaged it into the financial infrastructure and the issues related to the monetization of RWA. At the same time, XRP Ledger has recently received more attention in the chain of real assets.