Ripple has taken a groundbreaking step by launching the first tokenized money market fund on the XRP Ledger. The fund, valued at $4.77 billion (£3.8 billion), is managed by asset manager Abrdn. This innovation marks an important development in the financial world and offers new opportunities for institutional investors.
Collaboration with Archax: a breakthrough for professional investors
The tokenization was made possible through Ripple’s partnership with Archax, the UK’s first Financial Conduct Authority (FCA) regulated cryptocurrency exchange. Only professional investors have access to the Abrdn Liquidity Fund via the Archax platform. This approach emphasizes the focus on security and regulation, which is crucial for the adoption of blockchain technology in the traditional financial sector.
Blockchain makes financial processes more efficient
Ripple states that the tokenization of real-world assets (RWAs), such as the Abrdn Liquidity Fund, reduces operational costs and accelerates transaction settlement. Duncan Moir, senior investment manager at Abrdn, called this “an important step in modernizing traditional financial processes.”
Ripple’s ambition: conquer the $16 trillion market
As part of its strategic RWA plans, Ripple has invested $5 million in tokens on the Abrdn Liquidity Fund. This investment is an important step toward a market expected to be worth $16 trillion by 2030, according to Boston Consulting Group.
The market for tokenized money market funds is growing rapidly and now accounts for more than $1 billion in assets under management. The BlackRock USD Institutional Digital Liquidity Fund tops the list with $443.9 million, according to data from Dune Analytics.
Competition in the RWA sector
Ripple faces established competitors in the sector such as Ethereum and Stellar, which manage $3.07 billion and $386.2 million in tokenized assets respectively. Government bonds and commodities are the most commonly tokenized assets, excluding fiat-backed stablecoins. Together, these assets represent a value of more than $3.4 billion.
XRP Token Rises Nearly 30%
Ripple’s XRP token has also made significant gains this week, rising 27.9% to $1.43. This increase reflects the increasing popularity of Ripple’s technology and investor confidence.
Why this matters
The launch of the first tokenized money market fund on the XRP Ledger demonstrates how blockchain technology can transform traditional financial processes. Ripple is taking an important step in the world of tokenized assets, a market that is growing rapidly and attracting increasing attention worldwide.
Source: https://newsbit.nl/ripple-lanceert-eerste-getokeniseerde-geldmarktfonds-op-xrp-ledger-een-mijlpaal-in-blockchain-financiering/
