BlackRock BUIDL Fund’s XRP Ledger Expansion: The Institutional Bridge to RWA Tokenization

The intersection of traditional finance and blockchain technology is accelerating, and few developments symbolize that convergence more clearly than BlackRock’s $2 billion BUIDL fund. Managed in partnership with Securitize and currently operating on the Ethereum network, the BUIDL fund has demonstrated that tokenized securities—representing real-world assets (RWAs) like short-term U.S. Treasury bills—can achieve operational legitimacy within global finance. Yet, as institutional demand grows, the question arises: is Ethereum’s infrastructure the optimal long-term environment for scaling compliant, high-volume asset management?

This analysis explores a forward-looking scenario: the potential expansion of BlackRock’s BUIDL fund to the XRP Ledger. While no official announcement from BlackRock or Ripple confirms such a move, the logic for it is grounded in measurable technical and economic factors. The XRP Ledger’s unique combination of low fixed fees, 3–5 second finality, and a built-in decentralized exchange (DEX) creates a compelling case for institutional-grade RWA tokenization. In this context, XRP Ledger represents not a speculative alternative but a strategically efficient infrastructure layer for the next phase of asset management on blockchain.

In this article, we will examine the BUIDL fund’s structure and objectives, analyze the technical rationale behind considering XRP Ledger for institutional capital deployment, and evaluate how such a shift could signal the maturation of blockchain-based securitization. The discussion will maintain an analytical and evidence-based tone, aligning with institutional research standards rather than speculative commentary.

The BUIDL Fund Mandate: Understanding Securitization on Blockchain

To understand why XRP Ledger could be a technically and economically rational choice for the BUIDL fund, it is first essential to outline the fund’s core operational design. BlackRock’s BUIDL fund—formally known as the iShares Short-Term U.S. Treasury Fund—represents a pioneering step toward tokenized money-market exposure. Launched in early 2024 through Securitize Markets, the fund issues blockchain-based tokens backed by 100% short-term U.S. Treasuries and cash equivalents (BlackRock iShares BUIDL Fact Sheet, Q3 2024).

These tokenized securities are distributed and managed via Securitize, a registered broker-dealer and transfer agent that ensures compliance with U.S. securities regulations. Each token on Ethereum corresponds to a share of the BUIDL fund and entitles holders to yield derived from the underlying Treasuries. This operational model delivers two immediate advantages over traditional funds: on-chain transparency of holdings and near-instant settlement between verified investors.

However, Ethereum’s general-purpose nature introduces performance and cost inefficiencies when scaled to institutional volumes. Settlement times can vary between 10 and 30 minutes during network congestion, while gas fees fluctuate dramatically with market activity (Securitize Disclosures, 2024). For a fund exceeding $2 billion in assets and targeting a high transaction frequency among qualified participants, such volatility poses material operational and accounting risks.

In contrast, institutional RWA tokenization—by definition—requires predictable, low-cost, and high-speed transaction processing. The underlying blockchain must provide consistency comparable to legacy financial systems, where settlement finality and cost are standardized. This is where the potential relevance of the XRP Ledger emerges. With its deterministic transaction fees (typically under $0.01) and sub-five-second settlement finality (Ripple XRP Ledger Docs), the network offers performance characteristics that closely align with the operational requirements of large-scale securitization funds.

The Core Requirement: Settlement Speed and Compliant Infrastructure

At its foundation, the BUIDL fund structure illustrates the industry’s transition from token speculation to regulated asset securitization. Tokenized securities like BUIDL are not decentralized tokens but digitized representations of legally recognized financial instruments. This means every component of the system—issuance, settlement, custody, and redemption—must function with compliance-grade precision. A blockchain’s performance and predictability, therefore, directly impact not just user experience but regulatory alignment.

The current Ethereum-based model relies heavily on off-chain verification layers (via Securitize) and on-chain settlement for token transfers. While effective for early adoption, this dual-layer approach creates scalability bottlenecks and introduces variable cost structures. If BlackRock and Securitize intend to scale the fund’s investor base or token mobility across secondary markets, a blockchain with lower operational friction becomes strategically relevant.

Furthermore, the concept of tokenized security settlement speed is central to institutional adoption. Traditional brokerage systems settle trades on a T+2 basis—two business days after transaction execution. In contrast, blockchain tokenization promises near-instant settlement, eliminating custodial lag and reducing counterparty risk. However, only blockchains with high throughput and deterministic performance can maintain this standard at scale.

The following comparison illustrates how the XRP Ledger’s architecture could outperform both traditional systems and Ethereum’s L1 tokenization model for institutional-grade RWAs:

As the table shows, the XRP Ledger provides settlement finality and cost predictability that mirror the reliability of legacy systems while preserving the transparency and programmability of blockchain infrastructure. This combination makes it uniquely positioned to handle the institutional-grade requirements of tokenized securitization funds like BUIDL.

Technical Rationale: Why XRP Ledger for Institutional Capital?

For institutional funds like BUIDL, blockchain selection is not an ideological choice—it is a logistical and economic one. The chosen infrastructure must minimize operational friction, ensure compliance compatibility, and deliver predictable performance under scale. From that perspective, the XRP Ledger (XRPL) offers distinct advantages over Ethereum’s current Layer 1 implementation, particularly when evaluated through the lens of institutional RWA securitization.

The first differentiator is cost determinism. Ethereum operates under a gas-based fee model, where transaction costs are denominated in ETH and fluctuate according to network demand. This introduces accounting uncertainty and exposes institutional users to crypto-market volatility, even for basic settlement operations. In contrast, XRPL transactions incur a fixed, nominal fee—typically less than $0.01—regardless of network congestion (Ripple XRP Ledger Docs, 2024). For a fund processing potentially thousands of tokenized share movements daily, this consistency translates directly into lower reconciliation overhead and simpler auditability.

The second factor is settlement finality. Ethereum’s probabilistic finality—where transactions may be temporarily reversible until multiple confirmations—can complicate compliance auditing and net asset value (NAV) calculations for tokenized funds. The XRP Ledger, by design, achieves deterministic finality within 3–5 seconds, allowing each transaction to be recorded as final and immutable almost instantly. This near-real-time assurance of settlement is critical for institutional investors accustomed to clearly timestamped and final trade execution records.

Beyond speed and cost, the XRP Ledger’s architecture also supports features inherently suited to regulated financial instruments. Its Issued Currencies (IOU) framework allows institutions to create digital representations of real-world assets that retain direct issuer-trust relationships. In practical terms, each IOU on XRPL represents a tokenized claim against an identifiable entity, enabling built-in mechanisms for KYC enforcement, blacklisting, or asset freezing—functionalities that align with securities regulation without requiring external smart contracts.

This design distinction has profound implications for funds like BUIDL. On Ethereum, Securitize must deploy and maintain complex smart contracts to represent, distribute, and manage the BUIDL tokens. These contracts handle compliance logic, transfer restrictions, and dividend mechanisms. Each operation introduces gas costs and potential code risks.

On XRPL, equivalent compliance logic can be implemented natively through trust line configurations and Hooks—small, on-ledger pieces of logic that execute deterministically and inexpensively. This combination yields both cost efficiency and regulatory reliability, making XRPL an infrastructure aligned with institutional requirements rather than consumer speculation.

Private Blockchain RWA vs Public XRP: Compliance Meets Transparency

One of the enduring debates in institutional tokenization is whether regulated RWAs should exist on private permissioned blockchains or on public decentralized networks. Private chains offer control and privacy, but they also replicate the siloed inefficiencies of traditional finance. Public ledgers like XRPL, on the other hand, introduce global transparency and liquidity—but must still meet regulatory compliance thresholds. The potential BlackRock BUIDL fund’s XRP Ledger expansion scenario sits precisely at this intersection.

From a compliance standpoint, the XRPL does not seek to replace off-chain regulatory frameworks. Instead, it complements them. In a BUIDL-type setup, investor verification (KYC/AML) and fund governance would continue off-chain through licensed intermediaries such as Securitize. Only the resulting settlement layer—token issuance, transfer, and redemption—would operate on the public XRP Ledger. This dual model provides the best of both worlds: compliance through off-chain licensing, and efficiency through on-chain speed.

Public blockchains like XRP Ledger also bring an underappreciated benefit for institutional capital—audit transparency. Every token movement is verifiable on-chain, enabling regulators, custodians, and auditors to independently confirm supply integrity and transaction histories. This visibility contrasts sharply with the opaque reporting cycles of traditional custodial systems and even some permissioned blockchain environments. In effect, the XRPL’s open data structure transforms regulatory compliance from a static reporting process into a dynamic, verifiable state of record.

Furthermore, the global accessibility of a public ledger creates secondary market potential for tokenized RWAs. If institutional-grade assets like BUIDL shares can move between verified entities instantly and at negligible cost, the foundation is laid for a new class of regulated liquidity pools. These markets would operate within existing securities frameworks but leverage blockchain settlement efficiency to unlock cross-border asset mobility—an essential component of the evolving asset management on blockchain ecosystem.

From a strategic viewpoint, the private-versus-public discussion is also a question of scalability and trust architecture. Private chains require coordination among limited participants, effectively reintroducing centralized trust and operational overhead. The XRP Ledger, being open-source and globally validated, distributes that trust across a diverse validator network, achieving both performance and resilience without relying on a single operator. For institutions managing billions in tokenized assets, this decentralization translates to systemic robustness—a critical factor in long-term infrastructure decisions.

In summary, the technical rationale for considering XRP Ledger in the context of BlackRock’s BUIDL fund is rooted in measurable institutional priorities: deterministic settlement, predictable fees, regulatory compatibility, and operational transparency. These attributes collectively address the primary pain points of Ethereum’s current model and align with the financial logic that governs real-world securitization. While speculative enthusiasm around “XRP adoption” often dominates public narratives, the more substantive argument lies in pure efficiency economics—an argument that institutional investors, not retail traders, ultimately prioritize.

The next section explores the macroeconomic dimension of this shift—how RWA tokenization impacts market liquidity, fractional ownership, and the broader future of institutional asset management on blockchain infrastructure.

The Economics of Tokenization: RWA Liquidity and Fractional Ownership

While the technical superiority of a blockchain determines its operational feasibility, the ultimate driver of institutional adoption is economic. In the case of RWA tokenization, the fundamental promise is liquidity—transforming traditionally illiquid assets into divisible, transferable, and yield-bearing digital representations. The BlackRock BUIDL fund, by tokenizing short-term U.S. Treasuries, has already proven that regulated institutions can issue tokenized securities within compliance frameworks. Yet, the broader financial implications of expanding such operations to a more scalable and cost-efficient chain like the XRP Ledger are profound.

At the heart of this transformation lies the concept of fractional ownership of RWA. Historically, access to fixed-income instruments or high-quality securitized assets has been restricted to large investors and institutions due to administrative and custodial costs. Tokenization eliminates those barriers by allowing fractionalized representation of underlying assets, enabling investors to hold micro-shares that settle instantly and cost-effectively. This democratization of access does not inherently compromise compliance; on the contrary, platforms like Securitize integrate identity verification at the wallet level, ensuring that even fractionalized investors meet KYC/AML standards.

From an institutional perspective, fractional ownership also enhances portfolio efficiency. Liquidity management becomes more granular, and fund managers can rebalance exposure across tokenized instruments with precision and speed. The XRP Ledger’s near-zero transaction fees and three-second settlement finality enable these micro-adjustments to occur at negligible operational cost—something impractical under Ethereum’s variable gas model or traditional custodial frameworks. Over time, this efficiency compounds into measurable capital optimization.

Liquidity as the Engine of Tokenized Asset Growth

The second pillar of economic rationale is liquidity. Tokenized RWAs can only fulfill their potential if they circulate in secondary markets where verified participants can trade them freely. On Ethereum, such secondary liquidity is constrained by high transaction costs, network congestion, and reliance on external decentralized exchanges (DEXs) that often lack institutional-grade compliance. The XRP Ledger’s built-in DEX changes that equation fundamentally.

Unlike most Layer 1 blockchains, the XRP Ledger was designed with a native decentralized exchange integrated directly into its consensus layer. This DEX enables the seamless exchange of issued currencies (IOUs) without smart contract dependencies. In practice, this means that BUIDL tokens—or any tokenized representation of U.S. Treasuries—could be listed and traded directly on-ledger between verified wallets under predefined compliance rules (Ripple Developer Documentation, 2024).

The implications are significant. Institutional RWA markets depend on transparent order books, rapid settlement, and low spreads. The XRPL’s built-in DEX supports all three, offering deterministic pricing and atomic settlement. Moreover, the system’s inherent integration with liquidity bridges allows for interoperable trading across assets—both fiat-backed stablecoins and tokenized securities—without relying on external middleware. For fund managers, this architecture reduces counterparty risk and allows immediate valuation updates, improving transparency and investor confidence.

Consider a hypothetical scenario: a verified institutional investor holds $50 million in tokenized BUIDL shares on the XRPL. Market conditions shift, and the investor wishes to rotate part of that exposure into a stablecoin-backed liquidity pool or another tokenized RWA offering yield differentiation. On XRPL, this conversion can occur within seconds, at a predictable fee below one cent, with settlement finality verifiable on-chain. This liquidity dynamic mirrors the efficiency of traditional electronic trading systems—but operates without intermediaries and with blockchain-grade transparency.

RWA Tokenization Benefits for the Broader Market

Beyond immediate fund-level efficiency, RWA tokenization carries systemic economic benefits for the broader financial ecosystem. The first is capital unlocking. Trillions of dollars in real-world assets—ranging from corporate bonds and real estate debt to trade receivables—remain trapped in illiquid structures due to legacy settlement processes. By migrating such instruments onto high-speed, low-cost ledgers, asset managers can fractionalize exposure, create new liquidity venues, and attract previously excluded investors.

Second, tokenized RWAs improve price discovery. Because transactions occur on transparent, auditable ledgers, secondary market pricing becomes visible and verifiable in real time. This contrasts sharply with opaque over-the-counter (OTC) trades in traditional fixed-income markets. Over time, this transparency can reduce spreads, improve valuation accuracy, and lower systemic risk—especially when institutional participants transact through compliant, public infrastructure like XRPL.

Third, tokenization enhances collateral efficiency. In decentralized finance (DeFi), assets can serve as collateral for lending, staking, or derivative contracts. If compliant, tokenized securities like BUIDL shares could eventually serve similar purposes within regulated environments—unlocking liquidity without requiring full redemption. The XRP Ledger’s fast settlement cycles make it feasible for custodians or financial institutions to accept these instruments as collateral with near-instant verification, minimizing exposure to counterparty or market risk.

The Role of the XRP Ledger’s Built-In DEX in Institutional Context

One of the most underappreciated elements of the XRP Ledger is its native liquidity architecture. Unlike Ethereum-based DEXs that depend on external smart contracts and liquidity pools, XRPL’s DEX operates natively within the ledger. This allows for unified pricing and settlement between issued currencies and XRP itself, without requiring wrapping or bridging mechanisms that introduce risk. For institutional RWA tokenization, this structure delivers three advantages:

1. Operational efficiency: Every trade is confirmed at the ledger level with deterministic finality, reducing reconciliation delays.
2. Compliance enforcement: Trades between issued currencies can be restricted to verified wallets or institutions, ensuring adherence to regulatory standards.
3. Liquidity continuity: Because all issued currencies exist within the same ledger environment, capital flows seamlessly between asset classes—BUIDL shares, stablecoins, or other RWAs—without network friction.

The DEX also supports order book transparency, allowing regulators and auditors to observe liquidity formation in real time. For BlackRock and its partners, such visibility could transform fund oversight, providing a continuously auditable trail of secondary trading activity that enhances investor protection and operational governance. In an era of increasing regulatory scrutiny over tokenized assets, this architecture represents a strategic differentiator.

Ultimately, the economic rationale for XRP Ledger integration lies in alignment: its infrastructure directly supports the objectives of institutional fund management—predictability, compliance, and liquidity. When combined with the structural advantages of RWA tokenization, this creates a self-reinforcing ecosystem where efficiency drives adoption, and adoption deepens market liquidity. For a fund like BUIDL, the shift from Ethereum’s cost-variable environment to XRPL’s deterministic framework could mark a pivotal moment in the institutional evolution of blockchain-based asset management.

The next section will explore the strategic implications of this scenario—how such an expansion would signal to global markets that the XRP Ledger is no longer a remittance tool but a mature, enterprise-grade platform for institutional RWA securitization.

Strategic Signal: XRP Ledger for Institutional RWA Securitization

The potential consideration of the XRP Ledger for institutional RWA securitization represents more than a technical shift—it is a strategic signal to the global financial ecosystem. If a fund of BlackRock’s scale were to evaluate or adopt XRPL as part of its operational infrastructure, the move would effectively validate public blockchain technology as a compliant and enterprise-ready foundation for asset management.

Historically, the institutional view of blockchain has been bifurcated: public networks were seen as efficient but unregulated, while private blockchains were considered compliant but operationally limited. A transition by BlackRock toward a public ledger like XRPL would bridge this divide, establishing that institutional compliance and public transparency can coexist within a single infrastructure layer. This hybrid model aligns directly with the demands of regulators and market participants alike: transparency without chaos, decentralization without anarchy.

The strategic importance of this shift lies in its signaling power. BlackRock’s BUIDL fund already represents the convergence of on-chain and off-chain finance. If such a fund demonstrates confidence in the XRP Ledger’s architecture, it would encourage other asset managers, custodians, and even sovereign wealth funds to explore similar integrations. In essence, the world’s largest asset manager would be endorsing an open blockchain as a viable backbone for compliant securities—an endorsement with enormous ripple effects across both traditional and digital finance sectors.

Furthermore, such a move would redefine XRP’s industry perception. For years, XRP has been publicly associated with cross-border remittances and payment liquidity. While these remain valid applications, institutional RWA securitization represents a higher-order use case—transforming the ledger from a transactional network into an infrastructure layer for tokenized capital markets. The transition from payment rails to asset rails would signal the maturation of blockchain finance itself.

BUIDL Fund Technical Integration XRP: Developer Implications

The practical implementation of the BUIDL fund technical integration XRP would involve several well-defined steps. Each stage would require collaboration between BlackRock, Securitize, and Ripple’s developer ecosystem to ensure compliance, security, and interoperability with existing financial systems.

1. Issuance via XRPL Issued Currencies (IOUs): The first step would be the creation of a dedicated issued currency on the XRP Ledger representing BUIDL shares. Each token would correspond to a verifiable unit of fund ownership, backed 1:1 by underlying U.S. Treasuries held by BlackRock’s custodians. The XRPL’s IOU model supports fine-grained trust lines, ensuring that only verified participants—institutions and accredited investors—can hold or transfer the tokens.

2. Compliance Logic through Hooks or EVM Sidechain: To enforce investor verification, transfer restrictions, and corporate actions (e.g., dividends or redemption events), BlackRock and Securitize could utilize Hooks—lightweight pieces of logic embedded directly into XRPL accounts. Alternatively, the EVM sidechain, which enables Solidity-compatible contracts, could host more complex compliance layers. This hybrid model ensures that all compliance requirements are met without undermining the ledger’s native performance efficiency.

3. Integration with Custodians and Regulators: Since BUIDL operates under U.S. regulatory oversight, custodian banks and transfer agents would remain responsible for maintaining off-chain records. The on-chain representation, however, would provide verifiable proof of ownership and transaction history. Regulators could monitor fund activity in real time, leveraging XRPL’s transparent data architecture for compliance auditing. This interoperability between off-chain governance and on-chain execution would exemplify the regulatory-ready nature of institutional blockchain integration.

4. Liquidity Enablement via Built-In DEX: Once issued, the BUIDL tokens could be listed on the XRPL’s built-in decentralized exchange for secondary trading among verified wallets. This feature eliminates the need for third-party liquidity providers or smart contract-based DEXs, minimizing risk exposure. The atomic nature of XRPL trades ensures that settlement occurs simultaneously with execution—an essential requirement for compliant tokenized securities.

5. Cross-Ledger Interoperability: In the long term, the BUIDL tokens could interact with other institutional networks through bridges or interoperable protocols like the Interledger Protocol (ILP). This capability would enable seamless asset mobility across blockchains and financial systems, reinforcing BlackRock’s multi-chain strategy without introducing fragmentation or custody complexity.

For developers, this integration scenario also highlights the growing importance of low-code, compliance-oriented blockchain architecture. Instead of deploying high-risk smart contracts, institutional projects can leverage XRPL’s deterministic primitives to achieve regulatory outcomes with minimal surface area for bugs or exploits. This shift represents an evolution in blockchain design—from experimentation to industrial-grade reliability.

Conclusion: The Future of Asset Management on Blockchain

The strategic and technical rationale behind a potential BlackRock BUIDL fund expansion to the XRP Ledger reveals a broader industry trend: the migration of institutional capital toward performance-optimized, compliance-compatible blockchains. As the world’s largest asset managers explore tokenization, the critical determinants of success are no longer speculative hype or community enthusiasm—they are transaction finality, cost predictability, interoperability, and regulatory clarity.

Ethereum, despite its pioneering role in programmable finance, faces persistent scalability and fee unpredictability challenges. Private blockchains, though secure, lack the transparency and network effects required for global liquidity. The XRP Ledger, with its unique blend of deterministic settlement, fixed cost structure, and built-in DEX functionality, emerges as a rare equilibrium point between these extremes. It delivers the operational dependability institutions demand while preserving the openness necessary for transparent, cross-border asset markets.

From a macroeconomic perspective, this evolution marks the next phase of asset management on blockchain. Funds like BUIDL demonstrate that tokenization is not a fringe experiment but a structural upgrade to how financial assets are issued, traded, and settled. Each incremental efficiency—faster settlement, lower fees, broader liquidity—translates into compounded advantages for global capital allocation. In that sense, XRPL’s suitability for institutional RWA securitization is not a question of if but when.

As regulatory frameworks mature and technological barriers continue to erode, the global financial infrastructure will increasingly resemble a layered ecosystem: centralized governance for compliance, decentralized ledgers for settlement, and interoperable bridges for liquidity. In such an ecosystem, the XRP Ledger can serve as a critical connective layer—enabling institutional-grade tokenization without compromising regulatory oversight or economic efficiency.

Ultimately, the analytical case for BlackRock’s consideration of XRP Ledger is grounded in logic, not speculation. It reflects the industry’s progression toward infrastructure that mirrors the rigor of traditional finance while unlocking the efficiencies of blockchain technology. Whether or not BlackRock formally transitions BUIDL to XRPL, the conversation itself signifies a paradigm shift: the recognition that open, public blockchains can meet—and perhaps exceed—the operational standards of institutional finance.

In that light, the institutional bridge to RWA tokenization is not merely a headline—it is the blueprint for the future of capital markets. The XRP Ledger, with its combination of speed, cost-efficiency, and compliance readiness, stands positioned not as a speculative network, but as a foundational pillar of tomorrow’s financial infrastructure.

Disclaimer

This article is for informational and analytical purposes only and does not constitute investment, legal, or financial advice.
The scenarios discussed, including any potential expansion of BlackRock’s BUIDL fund to the XRP Ledger, are hypothetical and should not be construed as official announcements or recommendations.
Readers should conduct their own due diligence and consult with qualified financial and legal professionals before making any investment or business decisions.
The author and publisher do not assume liability for any actions taken based on the content of this analysis.