Archax, said to be the first FCA regulated digital asset exchange, broker and custodian, has provided access to a money market fund from UK asset manager abrdn in tokenised form on the XRP Ledger (XRPL), a decentralised blockchain.
The fund comprises part of abrdn’s £3.8bn US dollar Liquidity Fund (Lux) fund and represents the first tokenised money market fund on the XRPL, further establishing it as one of the leading blockchains for real-world asset (RWA) tokenisation and institutional decentralised finance (DeFi).
This milestone is the result of an ongoing collaboration between Archax and Ripple, a specialist in enterprise blockchain and crypto solutions. It marks an important step towards unlocking operational cost savings and settlement efficiencies by deploying capital markets infrastructure on the XRPL.
According to McKinsey, tokenised money market funds already exceed $1bn in assets under management, and some projections estimate the value of tokenised assets could reach $16trn by 2030, signalling strong market demand.
Ripple will allocate USD$5 million into tokens on abrdn’s Lux fund. Ripple’s allocation represents part of a larger fund that Ripple will allocate to RWAs on the XRPL provided by a range of asset managers.
“The next evolution of financial market infrastructure will be driven by the broader adoption of digital securities,” said Duncan Moir, senior investment manager, abrdn. “Real benefits are to be had from leveraging the efficiency of moving the end-to-end investment and cash settlement process on-chain. The XRPL is an established venue for this thanks to its institutional-grade functionality, cost efficiency and built-in compliance capabilities. We are delighted to be working with Ripple and Archax to deliver this important milestone.”
“The arrival of abrdn’s money market fund on XRPL demonstrates how real-world assets are being tokenised to enhance operational efficiencies, while further reinforcing the XRPL as one of the leading blockchains for real-world asset tokenisation,” said Markus Infanger, senior VP, RippleX. “There is no question that the on-chain economy is gaining real traction. By working with companies like Archax, we are excited to help financial institutions like abrdn to seize the incredible opportunity represented by blockchain and digital assets technology to deliver real utility at scale.”
“Financial institutions are understanding the value of adopting digital assets for real world use cases,” said Graham Rodford, CEO, Archax. “There is now real momentum building for tokenised real-world assets, and Archax is at the forefront of tokenising assets such as equities, debt instruments and money market funds. In collaboration with Ripple, we are excited to help our clients such as abrdn, which manages over half a trillion pounds in assets (as at Q2 2024), to bring them to the XRPL using Archax’s tokenisation engine. Institutional buyers can now purchase abrdn’s Lux fund directly from Archax in token form.”
Archax has used Ripple’s digital assets custody solutions since 2022. As an increasing number of investors hold their tokenised money market fund units on the XRPL, Ripple Custody is drawing on its long history working with top-tier institutional customers and regulated entities to enable them to tokenise, store, exchange and move value.
The XRPL is a proven and scalable blockchain purpose-built to meet the needs of financial institutions. With native capabilities such as tokenisation, trading, escrow, and movement of assets, the XRPL provides a strong foundation for RWA tokenisation and institutional-grade DeFi. Companies like Ripple have been using the XRPL for over a decade to power financial use cases including global payments, digital asset custody and stablecoin issuance.
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