Ripple Introduces Tokenized Money Market Fund on XRP Ledger in RWA Push

Digital payment network Ripple announced on Monday plans to tokenize the first-ever money market fund on its XRP Ledger (XRPL), a public Layer 1 blockchain.

The move aims to leverage blockchain efficiency and security to further advance the tokenization of real-world assets (RWA).RWAs describe digital tokens that represent physical assets such as real estate, commodities, and currencies. Like cryptocurrency, RWAs can be bought, sold, or traded on digital platforms.

Ripple collaborated with UK-based digital securities exchange Archax and global investment firm Abrdn to carry out the project.

Abrdn offered up a $4.77 billion US dollar Liquidity Fund (Lux) to be tokenized, according to a Nov. 25 Ripple statement.

Ripple plans to allocate $5 million to purchase tokens representing shares in Abrdn's Lux fund. This investment is part of a broader initiative to partner with various asset managers and broaden the availability of RWAs on the XRP Ledger.

RWA Takeover

Tokenized money market funds already surpass $1 billion in assets, and projections by American management consulting firm McKinsey indicate the tokenized asset market could reach $16 trillion by 2030.

For those heavily invested in cryptocurrency, diversifying with tangible traditional assets can potentially strengthen their portfolios.

Markus Infanger, Senior Vice President at Ripple, echoed that the on-chain economy is gaining traction.

“By working with companies like Archax, we are excited to help financial institutions like Abrdn to seize the incredible opportunity represented by blockchain and digital assets technology to deliver utility at scale,” he added.

Meanwhile, Archax called the initiative groundbreaking on X, noting that it will pave the way for “enhanced operational efficiencies and institutional adoption of real-world asset (RWA) tokenization.”

“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.”

To date, the RWA space has been dominated by Ethereum (ETH) and Stellar (XLM), which have successfully tokenized $3.10 billion and $386.2 million worth of assets, respectively, according to Dune Analytics data.