Archax has introduced a tokenized version of a money market fund offered by abrdn on the XRP Ledger (XRPL). The development came through a collaboration with Ripple.
In a recent press release, the blockchain technology provider shared that the fund consists of abrdn’s $3.8 billion Liquidity Fund (Lux). It is the first of its kind on the XRPL.
The arrangement adds to XRPL’s use case in tokenizing real-world assets and institutional decentralized finance. It is also expected to use the blockchain infrastructure to reduce costs and increase efficient financial transactions.
According to McKinsey, tokenized money market funds are already managing more than $1 billion in assets. Demand for this space is increasing and predictions indicate tokenized assets could reach a value of $16 trillion by 2030.
Ripple will issue $5 million into tokens on Archax’s abrdn
The $5 million investment in tokens from abrdn’s Luxembourg-based fund is a part of Ripple’s long-term plan to invest funds in Real-World Assets (RWAs) on the XRP Ledger (XRPL) through a range of asset managers.
“The next evolution of financial market infrastructure will be driven by the broader adoption of digital securities,” stated Duncan Moir, Senior Investment Manager at abrdn. He also pointed out that XRPL’s reliability and compliance features make on-chain finance a reality.
Ripple’s Markus Infanger noted that the adoption of blockchain to tokenize real-world assets is moving very fast. According to him, XRPL’s role is to allow financial institutions such as abrdn to leverage blockchain to realize the benefits of scalability.
Graham Rodford, Archax CEO added financial institutions are increasingly finding tokenized assets to be of value. With Archax’s platform, abrdn, which manages over £500 billion in assets, is tokenizing funds and enabling them to be bought by institutional buyers through XRPL.
Archax has been using Ripple’s digital asset custody solutions since 2022. While Ripple Custody continues to deliver secure storage and management of these assets, more investors have begun to use the XRPL for tokenized fund units.
Tokenization, trading, and escrow are some of the features that the XRPL provides. These features have been used by Ripple and different companies to issue stablecoins and make payments.
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