Ripple is teaming up with Archax, a UK-regulated digital asset exchange, to launch a tokenized money market fund from UK asset manager abrdn on the XRP Ledger (XRPL) blockchain, according to a Nov. 25 press release. This is the first tokenized money market fund on XRPL and is part of abrdn’s Liquidity Fund (Lux) worth £3.8 billion.
Today, in partnership with @ArchaxEx and @abrdn_plc, we’re excited to announce the first tokenized money market fund on the XRP Ledger.
With $16T in tokenized assets projected by 2030, this milestone unlocks cost savings and settlement efficiencies by deploying capital markets…
— Ripple (@Ripple) November 25, 2024
The initiative is part of an ongoing partnership between Archax and Ripple. The move is aimed at enhancing operational efficiencies and cost savings in capital markets by leveraging XRPL’s infrastructure.
As noted in the press release, Ripple will invest $5 million into tokens on abrdn’s Lux fund as part of a larger allocation to real-world assets (RWAs) on the XRPL from various 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 at abrdn. “Real benefits are to be had from leveraging the efficiency of moving the end-to-end investment and cash settlement process on-chain.”
Tokenized money market funds are gaining traction. According to McKinsey, these funds have exceeded $1 billion in assets under management, with forecasts suggesting potential growth to $16 trillion by 2030.
“The arrival of abrdn’s money market fund on XRPL demonstrates how real-world assets are being tokenized to enhance operational efficiencies,” said Markus Infanger, Senior Vice President at RippleX.
According to Graham Rodford, CEO of Archax, financial institutions are increasingly recognizing the practical benefits of tokenizing real-world assets. The partnership with Ripple will help facilitate the efficient transfer and trading of these assets.
“Financial institutions are understanding the value of adopting digital assets for real world use cases,” Rodford said. “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.”
Archax has been using Ripple’s digital assets custody solutions since 2022. The XRPL provides native capabilities including tokenization, trading, escrow, and movement of assets, serving as a foundation for RWA tokenization and institutional-grade decentralized finance.
