XRP Ledger Powers First $1B Tokenized Fund: The Start of a $16T Asset Revolution

• Ripple and its partners Archax and abrdn launched the first tokenized money market fund on the XRP Ledger.
• Ripple has invested $5 million into the fund, showcasing confidence in XRPL’s ability to handle real-world asset tokenization.

The XRP Ledger (XRPL) is cementing its place as one of the leading institutional DeFi platforms with the tokenized money market fund offered by investment firms Archax and abrdn, joining the network. This partnership is a major testament to the effectiveness of the XRPL in real-world asset (RWA) tokenization and the compliance-oriented nature of the network.

Ripple tweeted about the significance of this milestone, stating, “$1B in tokenized money market funds today → $16T in tokenized assets by 2030. “

Archax and abrdn Launch Tokenized Fund on XRPL

abrdn, a UK-based asset manager, and Archax, a regulated digital asset exchange, revealed on November 25, 2024, that they will tokenize a money market fund on the XRPL. The fund, which comes from abrdn’s $3.8 billion US Dollar Liquidity Fund (Lux), is the first of its kind on XRPL. Ripple has pledged $5m to the fund, which shows the firm’s belief in the capacity of XRPL to handle RWAs tokenized on blockchain.

There are several benefits of tokenization, such as increased efficiency, reduced fees, and increased accessibility for institutional investors. As stated by McKinsey, the tokenized assets are expected to increase in value and may become worth $16 trillion in the next ten years. According to Duncan Moir, Senior Investment Manager at abrdn, XRPL’s institutional grade features are its ability to facilitate investment and settlement while adhering to the appropriate rules.

According to Ripple’s blog post, assets tokenized on blockchain platforms such as XRPL are highly efficient. The transactions take only 3-5 seconds to settle, and the charges are less than $0.01 per transaction, hence cutting out middlemen and their charges. The XRPL also has statistics such as Decentralized Identifiers (DID) that increase the credibility of institutional investors.

Another major factor that makes XRPL attractive is the issue of transparency. Since 2012, XRPL has successfully processed 2.8 billion transactions with no history of security breach, making it secure for tokenizing RWAs including equities, bonds and money market funds. The introduction of the tokenized abrdn fund also proves the increasing role of XRPL in the transformation of traditional finance via blockchain technology.

Future of XRPL and Tokenized Assets

Ripple’s investment in the tokenized abrdn fund and the launch of the Ripple USD (RLUSD) stablecoin show its long-term vision for blockchain in the financial industry. RLUSD stablecoin has already been listed on several platforms and aims to facilitate seamless cross-border transactions.

Furthermore, Ripple CTO David Schwartz recently also elaborated on the scalability of XRPL and how it can potentially process up to 50,000 TPS in the future, owing to technology. However, Schwartz also underlined that high TPS should always be accompanied by decentralization in order to secure the blockchain.

The tokenization of RWAs on XRPL paves the way for more institutions to embrace the Ripple network. Given its extremely low fees, fast settlement times, and focus on compliance, XRPL is well-equipped to respond to the increasing adoption of blockchain technologies in finance.