Emily Walker
Ripple Labs has launched the inaugural tokenized money market fund on the XRP Ledger (XRPL). This project, in collaboration with Archax and the UK asset management firm abrdn, marks a significant leap forward in the tokenization of real-world assets (RWAs) and boosts the institutional decentralized finance (DeFi) landscape within the XRPL ecosystem.
Ripple Ventures into the RWA Market
Archax, the first digital asset exchange regulated by the Financial Conduct Authority (FCA), has made abrdn’s £3.8 billion US dollar Liquidity Fund (Lux) accessible in a tokenized format on the XRPL. This tokenization aims to streamline operational expenses and improve settlement processes by utilizing XRPL’s capabilities.
According to Duncan Moir, a Senior Investment Manager at abrdn, “The financial market infrastructure’s next phase will emerge from widespread adoption of digital securities. There are substantial advantages to be gained by conducting the complete investment and cash settlement processes on-chain.”
Ripple has invested $5 million in tokens from the Lux fund, which is part of a larger approach to invest in RWAs on XRPL by collaborating with various asset management firms. Markus Infanger, Senior Vice President at RippleX, remarked, “The presence of abrdn’s money market fund on XRPL illustrates how RWAs are being tokenized to improve operational efficiencies, further establishing XRPL as a premier blockchain for RWA tokenization.”
Graham Rodford, CEO of Archax, emphasized the growing trend in asset tokenization: “Financial institutions are recognizing the advantages of integrating digital assets for practical applications. There is a genuine surge in demand for tokenized real-world assets, with Archax leading the charge in tokenizing various financial instruments like equities, debt, and money market funds.”
This partnership builds on Archax’s utilization of Ripple’s digital asset custody offerings since 2022. As interest in tokenized money market funds on XRPL continues to rise, Ripple Custody utilizes its experience with institutional clients to facilitate the tokenization, storage, exchange, and movement of digital assets.
The XRP Ledger’s features provide a strong basis for RWA tokenization and high-grade DeFi solutions, having been employed by Ripple for over a decade to support a range of financial services including global payments, digital asset custody, and stablecoin issuance.
Market insights from McKinsey suggest that assets under management in tokenized money market funds have surpassed $1 billion, with forecasts indicating that tokenized assets could reach a staggering $16 trillion by 2030.
As of now, XRP is trading at $1.47.