Out of the shadow of the SEC, Ripple's tokenization strategy in the Middle East has accelerated

Original Author: Weilin, PANews

While reaching a settlement with the U.S. Securities and Exchange Commission (SEC), Ripple is rapidly restarting its global expansion in the Middle East, with Dubai becoming a key location for its tokenized real-world assets (RWAs).

Recently, Ripple-backed blockchain XRP Ledger was selected as the underlying blockchain network for the Dubai real estate blockchain tokenization project, showing that Ripple and XRP's development in government-enterprise cooperation, cross-border settlement, and stablecoin infrastructure is gradually turning into a business breakthrough direction for the company.

Meanwhile, on May 29, VivoPower International, a Nasdaq-listed energy company, announced the completion of a $121 million private placement that will transform into a crypto asset reserve strategy with XRP at its core. Saudi Prince Abdulaziz bin Turki Abdulaziz Al Saud led a $100 million investment, demonstrating Middle Eastern capital's recognition and bet on the XRP ecosystem.

XRP Ledger Becomes Public Chain for Dubai's First Government Property Tokenization Project

On May 26, the Dubai Land Department (DLD) announced a partnership with asset tokenization platform Ctrl Alt to launch PRYPCO, the first government-led real estate tokenization project in the Middle East. The project, which is jointly supported by the Dubai Virtual Assets Regulatory Authority (VARA) and the Dubai Foundation for the Future, plans to enable the on-chain issuance of real estate assets on the XRP Ledger (XRPL) through Ctrl Alt's PRYPCO Mint platform, with a minimum investment threshold of AED 2,000 (approximately $545).

The project is an important part of Dubai's Real Estate 2033 Strategy, which aims to achieve a real estate tokenization market of AED 60 billion (US$16.3 billion) by 2033. Ctrl Alt has received a broker and issuer license from VARA and said it has completed the asset tokenization of nearly $295 million in assets.

Ripple, a major contributor and enabler of XRPL, has been given the role of a technology provider for the on-chain of assets under the auspices of the government, representing the expansion of the protocol from cross-border payments to RWA asset-backing. XRPL uses the Ripple Protocol Consensus Algorithm (RPCA) that does not require mining, which does not require a mining process that consumes a lot of energy and can achieve second-level transaction settlement.

XRPL is also actively promoting the stablecoin ecosystem on its own network. SG-FORGE HAS ANNOUNCED THAT IT WILL LIST EURCV, WHICH IS ANCHORED TO THE EURO, ON XRPL IN 2025; Braza Group will also launch BBRL, a stablecoin pegged to the Brazilian real, on XRPL, which will lay a solid foundation for building a multi-asset, multi-scenario tokenization foundation on XRPL.

At the same time, XRP has also gained favor with Middle Eastern capital. On May 29, VivoPower International (VVPR), a NASDAQ-listed energy company, announced the completion of a $121 million private placement that will transform into a crypto asset reserve strategy with XRP at its core. Saudi Prince Abdulaziz bin Turki Abdulaziz Al Saud led a $100 million round with former SBI Ripple Asia executive Adam Traidman serving as chairman of the advisory board. According to SEC filings, the company intends to issue 20 million shares of common stock at $6.05 per share.

Middle East Strategy Accelerates: Licensed by Dubai Financial Services Authority to Acquire Hidden Road

Brokerage Firm Ripple's focus on the Middle East market is no accident. Back in November 2020, Ripple set up its regional headquarters in the Dubai International Financial Centre (DIFC), a move the company said was a possible exit from the U.S. due to the lack of clarity over U.S. crypto regulatory policies. In December of the same year, the SEC first charged Ripple CEO Brad Garlinghouse and co-founder Chris Larsen with conducting an unregistered securities offering through the sale of Ripple's digital token, XRP, beginning in 2013. The SEC said Ripple raised $1.3 billion through these alleged securities sales, and Ripple said XRP was not a security. After several years of evolution and development, the Middle East now accounts for about 20% of Ripple's global customers.

In March this year, Ripple was granted a regulatory license by the Dubai Financial Services Authority (DFSA) to become DIFC's first compliant blockchain payment provider, officially launching a compliant crypto cross-border payment business in the UAE. In May, Ripple announced a partnership with Zand Bank, a UAE digital bank, and Mamo, a fintech company, to embed Ripple's cross-border payment system into its financial services stack, enabling round-the-clock cross-border settlements. Zand Bank also plans to launch an AED-pegged stablecoin to enhance local digital payment capabilities.

The stablecoin RLUSD is also enriching Ripple's business ecosystem and supporting the company's business expansion. Not only did RLUSD offer an annualized yield (APR) of up to 8%-9% on Aave, which quickly attracted about $150 million in funding, but it also landed on Euler Finance on May 29, allowing users to lend and borrow RLUSD directly on the platform, and use it as collateral. Currently, RLUSD's Annualized Yield on Euler deposits (Supply APY) is as high as 22.05%. As previously reported by PANews, Ripple has also recently partnered with Chainlink to increase the utility of RLUSD in the DeFi space. Ripple has also partnered with Revolut and Zero Hash to expand RLUSD's market reach. RLUSD is also integrated into its payment solution, Ripple Payments, for cross-border payments for customers like BKK Forex and iSend.

In addition to the payment business, Ripple is also stepping up its layout in the fields of brokerage, custody and tokenization. On April 8 of this year, crypto payments company Ripple announced plans to acquire prime brokerage firm Hidden Road for $1.25 billion, with the aim of expanding its services to institutional investors. CEO Brad Garlinghouse stated, "Ripple needs to make sure we have the infrastructure in place to attract and scale to a larger, larger community of people. The transaction was primarily in the form of cash, XRP, and shares. Subject to regulatory approvals, the acquisition is expected to close in the coming months.

Upon completion of the acquisition, Ripple will "inject billions of dollars in capital to provide immediate scale and meet the needs of Hidden Road's primary brokerage business." Garlinghouse said the prime broker will integrate stablecoin RLUSD as collateral for its prime brokerage product and explore the use of the XRP Ledger to "improve settlement efficiency."

According to public reports, Hidden Road plans to open an office in Abu Dhabi. According to people familiar with the matter, the office will be led by partner James Stickland. Hidden Road has received In-Principle Approval (IPA) from the Abu Dhabi Global Market Financial Regulatory Authority (FSRA) to provide clearing and prime brokerage services to institutional investors in the UAE.

Sources said Hidden Road could see members of the Abu Dhabi royal family join the board of directors of its local entity after receiving final regulatory approvals.

Can Tokenization-as-a-Service be Successful? Ripple's regain of the development time lost by the SEC's "hard control"

Ripple crypto lawyer John Deaton said that Ripple's acquisition of Hidden Road is not just a single expansion, but a forward-looking layout for the convergence of DeFi and TradFi. He pointed out that Hidden Road handles more than $3 trillion in transaction volume annually and serves more than 300 institutional clients, serving a bridge between traditional capital and on-chain clearing.

Deaton believes that Ripple's "Ripple Custody" custody service, together with the payment and stablecoin systems, constitutes a one-stop blockchain financial service platform. Its vision is to provide banks and other financial institutions with "Tokenization-as-a-Service" (Tokenization-as-a-Service) to realize the integration of the whole process from asset tokenization, mortgage payment to clearing flow.

According to the Boston Consulting Group (BCG), the digital asset custody market will exceed $16 trillion by 2030. In his opinion, Ripple is trying to seize this dividend and build a technical layer for the tokenization of global financial assets through the XRP Ledger.

Another reason for Ripple's acceleration in the Middle East is its recent developments in the U.S. regulatory environment. On May 9, Ripple reached a settlement agreement with the SEC, whereby Ripple will pay a $50 million fine and lift part of the ban. The SEC also stopped appealing the previous ruling, marking the end of this regulatory tug-of-war that has been going on since 2020.

Subsequently, on May 28, Ripple's Chief Legal Officer, Stuart Alderoty, filed a supplemental letter with the SEC, emphasizing that XRP does not constitute securities per securities, arguing that most crypto assets should not be considered securities in secondary market transactions, and recommending that the SEC introduce a "safe harbor" mechanism to provide more operational compliance guidance for the digital asset market.

At the same time, the approval of XRP spot ETFs is also advancing. On May 28, it was reported that the SEC has launched a formal review of the WisdomTree XRP Fund application submitted by the Cboe BZX exchange. If it can be successfully approved, Ripple may usher in another round of growth in capital and user inflows.

Overall, after several years of fierce battles with the SEC, Ripple is rapidly redeploying its global strategy with the Middle East, a regulatory-friendly frontier. XRP Ledger, as its technology hub, is taking on multiple roles from payment infrastructure, stablecoin liquidation, to asset tokenization. If Ripple can successfully promote the implementation of the "tokenization-as-a-service" model, the Middle East may become an important testing ground for Ripple to get rid of the regulatory shadow, realize the integration of DeFi and TradFi, and put assets on the chain.

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