- Ripple and Archax launched a tokenized $4.77B money market fund on the XRP Ledger.
- The project highlights the efficiency and growth of real-world asset tokenization.
- Ripple invested $5M, targeting professional investors via Archax’s platform.
- This move challenges Ethereum and Stellar in the $16T RWA market.
Blockchain payment company Ripple announced a game-changing initiative with the issuance of its first tokenized money market fund on XRP Ledger (XRPL). The first-of-its-kind launch is a result of a deal made possible by UK-based Archax, a Financial Conduct Authority (FCA)-regulated cryptocurrency exchange, broker, and custodian.
Ripple Partners with Archax for Innovation
This includes Abrdn’s US$4.77 billion (£3.8 billion) US Dollar Liquidity Fund, which represents a significant development in linking (RWAs) with blockchain technology. Ripple’s partnership with Archax makes Abrdn’s huge money market fund a key element of this innovative project.
Tokenization of the fund really underlines the growing trend of placing real-world assets on-chain, where blockchain can bring about operational efficiencies, cost savings, and faster settlement processes.
“Real benefits are to be had from leveraging the efficiency of moving the end-to-end investment and cash settlement process on-chain,” said Duncan Moir, a senior investment manager at Abrdn, while touting blockchain’s potential for transformative impacts on mainstream finance.
Ripple Invests $5M in Tokenized Liquidity Fund
Ripple clarified that the tokenized fund will initially be available exclusively to “professional investors” via Archax’s secure tokenization platform. In a further demonstration of its commitment, the platform has allocated $5 million into tokens representing Abrdn’s US Dollar Liquidity Fund.
The platform’s foray into tokenized RWAs aligns with its broader ambitions to dominate a market projected to reach $16 trillion by 2030, according to Boston Consulting Group. RWAs, which include tokenized assets like government securities and commodities, are steadily gaining traction.
Tokenized money market funds alone currently account for over $1 billion in assets under management. BlackRock’s USD Institutional Digital Liquidity Fund leads the space with $443.9 million in tokenized assets, according to data from Dune Analytics and asset manager 21Shares.
Ripple’s efforts place it in direct competition with blockchain heavyweights Ethereum and Stellar. Ethereum leads with $3.07 billion in tokenized RWA assets, while Stellar has facilitated $386.2 million. The platform’s latest move underscores its determination to secure a significant share of the growing tokenization landscape.
Ripple Expands into Government Securities Market
The government securities and commodities RWA tokenization market is dominated, respectively, by $2.28 billion and $1.14 billion. Ripple’s initiative with Abrdn’s fund adds to this momentum and will promise more establishment of blockchain as a cornerstone of modern financial systems.
According to Graham Rodford, CEO of Archax, “There is now real momentum building for tokenized real-world assets.” The latest venture by Ripple simply points at innovation not just within the firm but also at strategic positioning in the fast-evolving RWA space.
Ripple’s launch of a tokenized money market fund could be a catalyst for wider blockchain adoption in traditional finance, offering a vision of things to come: digital assets seamlessly enmeshed with established markets.
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