A consortium of traditional finance and crypto firms, including J.P. Morgan, Mastercard, Ripple, and Ondo Finance, has completed a pilot program that has showcased the near-real-time redemption of a tokenized U.S. Treasury fund using the XRP Ledger (XRPL).
The transaction was meant to bridge public blockchain networks with legacy banking systems. “Wall Street is coming to the XRP Ledger,” Ripple’s Luke Judges said in response to the pilot.
According to the companies, the process was executed in three integrated steps. First, Ondo Finance processed the redemption of Ripple’s OUSG, a tokenized short-term U.S. government Treasury fund native to the XRPL.
Next, Mastercard’s Multi-Token Network routed the redemption instructions to Kinexys, J.P. Morgan’s blockchain unit. Finally, J.P. Morgan delivered U.S. dollars to Ripple’s bank account in Singapore.
Boosting efficiency
The integration aspires to solve settlement inefficiencies in the $30 trillion U.S. Treasury market. The systems that have been tested could potentially pave the way for a 24/7 ecosystem where trading, transferring, and collateralization never sleep.
Currently, tokenized Treasuries have reached just $15 billion, which is a mere drop in a vast ocean of capital. Institutional participation is expanding, with the Depository Trust & Clearing Corporation (DTCC) scheduled to launch a tokenization service in October.
Ripple characterized the transaction as an integrated flow where global banking infrastructure and public ledgers operate in tandem rather than independently.
More institutional financial entities, including DTCC and Nasdaq, are exploring the tokenization of real-world assets (RWAs) to test blockchain utility. This is emerging as a global trend.
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