KEY TAKEAWAYS
- Archax launches the first tokenized money market fund on the XRP Ledger, in collaboration with Ripple.
- This initiative aims to enhance operational cost savings and settlement efficiencies using blockchain technology.
- Tokenized assets are projected to reach $16 trillion by 2030, indicating strong market demand.
- Ripple invests USD$5 million into abrdn’s Lux fund, reinforcing its strategy to tokenize real-world assets on the XRPL.
Archax, the first FCA-regulated digital asset exchange, broker, and custodian, has announced the launch of a tokenized money market fund from UK asset manager abrdn on the XRP Ledger (XRPL). This initiative marks the first tokenized money market fund on the XRPL, a decentralized blockchain, and is part of abrdn’s £3.8 billion US dollar Liquidity Fund (Lux) fund.
This development is a result of ongoing collaboration between Archax and Ripple, a leader in enterprise blockchain and crypto solutions. The move is seen as a significant step towards enhancing operational cost savings and settlement efficiencies by deploying capital markets infrastructure on the XRPL.
Tokenization and Market Demand
According to McKinsey, tokenized money market funds already exceed USD$1 billion in assets under management. Some projections estimate that the value of tokenized assets could reach $16 trillion by 2030, indicating strong market demand for such innovations.
Ripple has committed USD$5 million into tokens on abrdn’s Lux fund. This allocation is part of a broader strategy by Ripple to invest in real-world assets (RWAs) on the XRPL, provided by various asset managers.
Industry Perspectives and Future Implications
Duncan Moir, Senior Investment Manager at abrdn, highlighted the benefits of leveraging blockchain technology for investment and cash settlement processes. He noted that the XRPL’s institutional-grade functionality and compliance capabilities make it an ideal platform for such initiatives.
Markus Infanger, Senior Vice President at RippleX, emphasized the growing traction of the on-chain economy. He stated that the tokenization of real-world assets on the XRPL enhances operational efficiencies and reinforces its position as a leading blockchain for RWA tokenization.
Graham Rodford, CEO of Archax, remarked on the momentum building for tokenized real-world assets. He noted that Archax is at the forefront of tokenizing various assets, including equities and debt instruments, and is collaborating with Ripple to bring these to the XRPL.
XRPL’s Role in Financial Innovation
The XRPL is recognized for its scalability and suitability for financial institutions, offering native capabilities such as tokenization, trading, and asset movement. Ripple has utilized the XRPL for over a decade to support financial use cases, including global payments and digital asset custody.
Archax’s use of Ripple’s digital assets custody solutions since 2022 underscores the growing interest in tokenized money market funds. As more investors hold these units on the XRPL, Ripple Custody continues to enable the tokenization, storage, and exchange of value for institutional customers.
For more details, the announcement can be found here.
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