Archax, the first FCA regulated digital asset exchange, broker, and custodian, has provided access to a money market fund from UK asset manager abrdn in tokenized form on the XRP Ledger (XRPL), a decentralized blockchain. The fund comprises part of abrdn’s £3.8 billion US dollar Liquidity Fund (Lux) fund and represents the first tokenized money market fund on the XRPL, further establishing it as one of the leading blockchains for real-world asset (RWA) tokenization and institutional decentralized finance (DeFi).
This milestone is the result of an ongoing collaboration between Archax and Ripple, the leader in enterprise blockchain and crypto solutions. It marks an important step towards unlocking operational cost savings and settlement efficiencies by deploying capital markets infrastructure on the XRPL.
According to McKinsey, tokenized money market funds already exceed USD $1 billion in assets under management, and some projections estimate the value of tokenized assets could reach $16 trillion by 2030, signaling strong market demand.
Ripple will allocate USD $5 million into tokens on abrdn’s Lux fund. Ripple’s allocation represents part of a larger fund that Ripple will allocate to RWAs on the XRPL provided by a range of asset managers.
“The next evolution of financial market infrastructure will be driven by the broader adoption of digital securities,” said Duncan Moir, Senior Investment Manager, abrdn. “Real benefits are to be had from leveraging the efficiency of moving the end-to-end investment and cash settlement process on-chain. The XRPL is an established venue for this thanks to its institutional-grade functionality, cost efficiency, and built-in compliance capabilities. We are delighted to be working with Ripple and Archax to deliver this important milestone.”
“The arrival of abrdn’s 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,” said Markus Infanger, Senior Vice President, RippleX. “There is no question that the on-chain economy is gaining real traction. By working with companies like Archax, we are excited to help financial institutions like abrdn to seize the incredible opportunity represented by blockchain and digital assets technology to deliver real utility at scale.”
“Financial institutions are understanding the value of adopting digital assets for real world use cases,” said Graham Rodford, CEO, Archax. “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. In collaboration with Ripple, we are excited to help our clients such as abrdn, which manages over half a trillion pounds in assets (as at Q2 2024), to bring them to the XRPL using Archax’s tokenization engine. Institutional buyers can now purchase abrdn’s Lux fund directly from Archax in token form.”
Archax has used Ripple’s digital assets custody solutions since 2022. As an increasing number of investors hold their tokenized money market fund units on the XRPL, Ripple Custody is drawing on its long history working with top-tier institutional customers and regulated entities to enable them to tokenize, store, exchange, and move value.