Ripple and Archax Launch First Tokenized Money Market Fund on XRP Ledger (XRPL)

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As a seasoned crypto investor with over a decade of experience in the financial markets, I find the collaboration between Archax, Ripple Labs, and abrdn to tokenize a money market fund on the XRP Ledger (XRPL) nothing short of groundbreaking. Having witnessed the evolution of blockchain technology from its infancy, it’s thrilling to see real-world asset tokenization gaining traction in capital markets.

UK-based digital asset platform Archax, which functions as an exchange, broker, and custodian, has teamed up with Ripple Labs to convert a money market fund managed by abrdn into tokens on the XRP Ledger (XRPL). This collaboration, as announced by Ripple in their press release, represents the initial tokenization of a money market fund on the XRPL. The move strengthens the blockchain’s reputation as a viable platform for real-world asset tokenization and decentralized finance (DeFi) applications among institutions.

1) The fund being discussed is a component of abrdn’s £3.8 billion US Dollar Liquidity Fund (Lux). This collaboration intends to cut operational expenses and improve settlement procedures by leveraging the blockchain infrastructure offered by XRPL. By incorporating tokenized funds onto XRPL, we are witnessing an increase in the acceptance of blockchain technology within capital markets.

Ripple highlights that McKinsey has mentioned that tokenized money market funds are currently managing over a billion dollars in assets worldwide. Forecasts indicate that the worth of all tokenized assets might surge to an astounding $16 trillion by 2030, demonstrating a growing interest in blockchain technology solutions.

Ripple is investing $5 million into tokens that represent a fund managed by abrdn, as part of an expansive plan to distribute funds towards financial institutions (RWAs) accessible on the XRP Ledger platform.

Participants from abrdn, Ripple, and Archax shared thoughts on how this project could impact financial markets. Duncan Moir, a Senior Investment Manager at abrdn, highlighted the advantages of transferring investment and transaction processes to blockchain technology, specifically pointing out XRPL’s compliance aspects and cost savings.

Meanwhile, Markus Infanger, Senior Vice President for RippleX, had this to say:

abrdn’s money market fund coming onto XRPL showcases the process of real-world assets being converted into tokens to boost operational efficiency, making XRPL one of the foremost blockchains for asset tokenization. It’s clear that the digital economy is growing in popularity. We’re thrilled to collaborate with firms like Archax and assist financial institutions such as abrdn in harnessing the potential of blockchain and digital assets technology to offer widespread utility.

As for Graham Rodford, the CEO of Archax, he said:

Financial organizations are recognizing the worth of incorporating digital assets into everyday applications, and there’s a significant push towards tokenized real-world assets right now. Pioneering companies like Archax are leading the charge by tokenizing securities such as stocks, bonds, and money market funds. In partnership with Ripple, we’re thrilled to assist clients, including abrdn who manages over half a trillion pounds in assets (as of Q2 2024), in transitioning these assets onto the XRPL using Archax’s tokenization platform. Now, institutional investors can buy abrdn’s Lux fund tokens directly from Archax.

Starting from 2022, Archax has been relying on Ripple’s custody services to oversee their tokenized assets. Ripple Custody leverages its expertise with institutional customers and regulated entities to ensure secure tokenization, safekeeping, and exchange of digital assets on the XRP Ledger (XRPL).

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2024-11-26 17:01