Ripple and Archax have launched the first tokenized money market fund based on the blockchain network on $XRP Ledger (XRPL), regulated under UK law.
Cryptocurrency exchange Archax, together with Ripple, provided access to the money market fund from the British asset management company abrdn. The fund is launched on the XRPL blockchain network and represents a tokenized portion of the assets of the abrdn Liquidity Fund (Lux), which has a volume of £3.8 billion (~$4.77 billion).
Archax is the first cryptocurrency exchange, broker, and custodian in the UK operating under a license from the Financial Conduct Authority (FCA). The company acts as a licensed intermediary in the tokenization of the abrdn money market fund. Access to the tokenized assets of the fund will only be available to professional investors.
The press release states that the new investment product will significantly reduce operational costs and improve settlement efficiency by using the XRPL infrastructure for capital markets. Furthermore, the new product highlights the global trend of tokenizing real assets (RWA) in relation to financial markets.
Duncan Moir, senior investment manager at abrdn, noted that the increased efficiency associated with using end-to-end investment and cash settlement processes through blockchain technology brings real benefits to market participants. In his opinion, the next stage in the evolution of financial market infrastructure will be associated with a broader adoption of digital securities.
Ripple will directly allocate $5 million to tokenized shares of Lux. It is noted that the allocated funds are part of a larger fund that Ripple plans to allocate for the support of tokenized assets based on XRPL.
It is worth noting that the market volume of tokenized real assets exceeded $13 billion in mid-November 2024. Tokenization is one of the main trends of the current year, and large companies, such as BNB Chain and Tether, are offering universal solutions for asset tokenization.
