Ripple Labs has introduced the first tokenized money market fund on the XRP Ledger (XRPL). The initiative, in partnership with Archax and UK-based asset manager abrdn, signifies a notable advancement in the tokenization of real-world assets (RWA) and the expansion of institutional decentralized finance (DeFi) for the XRP ledger ecosystem.
Ripple Enters The RWA Sector
Archax, recognized as the first Financial Conduct Authority (FCA) regulated digital asset exchange, broker, and custodian, has facilitated access to abrdnās Ā£3.8 billion US dollar Liquidity Fund (Lux) in a tokenized format on the XRPL. The tokenized Lux fund aims to optimize operational costs and settlement processes by leveraging the XRPLās infrastructure.
Duncan Moir, Senior Investment Manager at abrdn, commented on the development: āThe next evolution of financial market infrastructure will be driven by the broader adoption of digital securities. Real benefits are to be had from leveraging the efficiency of moving the end-to-end investment and cash settlement process on-chain.ā
Ripple has committed $5 million to tokens within abrdnās Lux fund, forming part of a broader strategy to invest in RWAs on the XRPL through collaborations with various asset managers. Markus Infanger, Senior Vice President at RippleX, stated, āThe arrival of abrdnās money market fund on XRPL demonstrates how real-world assets are being tokenized to enhance operational efficiencies, while further reinforcing the XRPL as one of the leading blockchains for real-world asset tokenization.ā
Graham Rodford, CEO of Archax, highlighted the increasing momentum in asset tokenization: āFinancial institutions are understanding the value of adopting digital assets for real world use cases. There is now real momentum building for tokenized real-world assets, and Archax is at the forefront of tokenizing assets such as equities, debt instruments and money market funds.ā
The collaboration builds on Archaxās use of Rippleās digital asset custody solutions since 2022. As investor interest in tokenized money market funds on the XRPL grows, Ripple Custody leverages its experience with institutional clients to support the tokenization, storage, exchange, and movement of digital assets.
According to the press release, the XRP Ledger capabilities provide a robust foundation for RWA tokenization and institutional-grade DeFi applications. Ripple has utilized the XRPL for over a decade, supporting various financial services such as global payments, digital asset custody, and stablecoin issuance.
Market analysis from McKinsey indicates that tokenized money market funds have surpassed $1 billion in assets under management, with projections suggesting the value of tokenized assets could reach $16 trillion by 2030.
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