Recently, referring to the Dutch central bank's transfer of approximately $11 billion in gold, Ripple CEO Brad Garlinghouse emphasized that traditional finance still relies on relatively slow infrastructure for asset transfers. His main point is that while ownership of assets can change, it is not necessarily necessary to physically move the underlying assets themselves.

The approach of the Dutch Central Bank

The Dutch Central Bank recently transferred approximately 86 tons of gold from North America back to London. Official statements indicate that most of this gold was not physically transported across the Atlantic; instead, it was sold in New York and then an equivalent amount of gold was repurchased in London.

This line indicates that London provides easier access to the world's deepest physical gold market and is also more conducive to trading reserves during crises. Garlinghouse believes that traditional finance has already completed the 'transfer of ownership' in an economic sense, it's just that the settlement process is still relatively slow.

Gold tokenization on XRP Ledger

Garlinghouse links this process to the tokenization of gold mentioned in XRP Ledger. XRPL now supports real-world assets, including gold-backed tokens, and related asset settlements can be completed on-chain in seconds.

It is mentioned in the text that the cumulative trading volume of tokenized gold on XRPL has exceeded one million US dollars. The physical gold bars are still kept by the custodian, but their digital representations can be directly transferred without the need to move the physical bars each time.

The point of contention lies at the settlement layer.

Garlinghouse is not saying that XRP will replace central bank gold. The article emphasizes that what he wants to illustrate is that asset transfers do not necessarily have to be accompanied by the physical transportation of assets.

In his view, the Dutch central bank's gold repositioning of about $11 billion precisely illustrates that traditional finance inherently facilitates changes in ownership through buying and selling. What tokenization aims to do is to make this process faster and easier to program.