🚀 LedgerRipple is set to release a new token standard in XRP Ledger this month, aiming to improve its support for real-world assets (RWAs). Jasmine Cooper, Ripple's head of DeFi product, recently discussed these improvements in a podcast, highlighting a new type of token called "multi-purpose tokens" (MPT). Cooper explained that MPTs are specifically designed for RWA , allowing metadata to be stored directly with the asset. This integration improves the scalability and flexibility of XRPL, making it more suitable for institutional use cases and lowering the barrier to entry for these organizations. Her comments have attracted significant attention from the XRP community.
In particular, the introduction of MPT is a key component of Ripple's broader strategy to create a comprehensive institutional DeFi ecosystem on the XRPL. This ecosystem is intended to facilitate a range of functions including asset issuance, value transfer, exchange and lending, while prioritizing security and regulatory compliance.In May, Ripple published a report , titled "Building Blocks of an Institutional DeFi on the XRP Ledger," which anticipates the release of the MPT standard in Q3 of 2024. According to the report, MPT will bring a new level of functionality and flexibility to XRPL .The report revealed that MPT will enable the creation of complex token systems that can represent different assets and entitlements through the use of metadata. This innovation is expected to be particularly useful for institutions seeking to tokenize diverse portfolios of assets, enabling efficient lifecycle management of digital assets.Ripple describes MPT as a standard for hybrid tokens that combines the benefits of both fungible and irreplaceable tokens. Currently, XRPL's fungible tokens lack key features, most notably metadata.For example, tokenizing an XRPL bond using traditional fungible tokens would not allow the recording in the chain of essential bond details such as face value, maturity date, coupon rate, and payment dates. This information gap creates inefficiencies and reduces transparency, making on-chain bonds less practical than traditional centralized infrastructure.To address these limitations, Ripple will introduce MPTs as a native standard for XRPL tokens, providing capabilities that developers can easily leverage through simple APIs from XRPL libraries. This development will enable more efficient, transparent and flexible tokenization of assets in the XRP Ledger.🪙