Ripple's XRP Ledger (XRPL) has been used in South Korea for settlement of tokenised government bonds.

The Crypto Basic, a blockchain outlet, reported on May 18 that Ripple worked with Kyobo Life Insurance to apply the XRP Ledger to the issuance, settlement and custody process for tokenised government bonds.

The case dovetails with Ripple Chief Executive Brad Garlinghouse (브래드 갈링하우스)'s recently highlighted strategy for onchain bond settlement. Garlinghouse pointed to tokenisation as a field for XRP use at a crypto event held earlier this month in Las Vegas. He said existing bond settlement systems are overly slow and inefficient. He argued it is only a matter of time before tokenised bond settlement shifts to a blockchain-based onchain structure.

Some in the market also say the idea has already entered a partial implementation stage. Market analyst Chart Nerd cited the cooperation between Kyobo Life Insurance and Ripple as an example, calling it an "already happening change" in a recent post on social media. Ripple carried out tokenised government bond transactions in South Korea in April, and it reportedly used its custody platform to handle issuance, settlement and custody procedures in the process.

The key is a change in settlement structure. Traditional bond transactions often take several days to complete settlement after going through multiple intermediaries and clearing procedures. By contrast, an XRP Ledger-based structure can shorten transactions to near real-time, improving processing efficiency and reducing counterparty risk, Ripple said.

Garlinghouse also highlighted structural strengths of the XRP Ledger. He said the XRP Ledger is one of the early decentralised networks that supports its own tokenisation framework at the base layer. That has also raised the possibility that Ripple could expand its influence in tokenisation of real-world assets such as bonds.

Ripple is putting more weight on focusing on specific areas than on an all-encompassing blockchain strategy. Garlinghouse said it will be a "multi-chain era" and drew a line at the idea of a single blockchain handling all demand. He added the XRP Ledger has strengths in payments and tokenisation, but trying to include every function could weaken competitiveness on speed and cost.

This strategy is interpreted as aiming to focus on areas where it has clear competitiveness, such as payments and tokenisation, rather than expanding the scope of XRP use excessively. With the global bond market estimated at about $140 trillion, market talk also suggests that if Ripple secures even part of that market, use of XRP and the XRP Ledger could expand significantly.

Some also call the case a test of whether XRP can expand beyond a cryptocurrency for simple remittances into the realm of real financial infrastructure. A key point to watch is whether the Kyobo Life Insurance case remains a one-off project or leads to additional participation by financial institutions.