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The U.K. asset manager has partnered with Ripple to transition traditional fund frameworks onto the blockchain as part of its initial tokenization initiative.
Ripple's Nigel Khakoo and Aviva Investors' Jill Barber. (Ripple, modified by CoinDesk)
What to know:
- Aviva Investors intends to tokenize traditional funds on the XRP Ledger in collaboration with Ripple.
- This initiative represents Aviva’s inaugural tokenization effort and Ripple’s first agreement with an asset manager based in Europe.
- The two companies aim to create regulated, blockchain-based fund structures beginning this year.
Aviva Investors, the asset management division of U.K. insurance company Aviva (AV), is set to tokenize traditional fund structures on the XRP Ledger (XRPL) through a partnership with blockchain company Ripple, as announced in a press release on Wednesday.
This collaboration will enable Ripple to assist Aviva Investors in issuing and managing tokenized funds on XRPL, a public blockchain tailored for financial transactions and payments. This initiative marks Aviva Investors’ entry into tokenization as it seeks to incorporate blockchain-based solutions into its offerings.
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For Ripple, this partnership signifies its initial collaboration with a Europe-based investment manager, enhancing its efforts to transition regulated financial assets onto the blockchain.
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Asset managers are increasingly exploring tokenization to modernize their fund structures, utilizing digital tokens to represent shares in money market funds, private credit, real estate, and various other strategies on a blockchain.
This strategy promises quicker settlement times, reduced operational expenses, and expanded distribution, along with features such as fractional ownership and automated compliance.
Leading firms like BlackRock, Franklin Templeton, and Hamilton Lane have already launched tokenized products, indicating a shift from experimental projects to active, regulated offerings targeted at institutional investors.
Aviva Investors and Ripple have announced plans to collaborate through 2026 and beyond to develop tokenized fund frameworks on XRPL.
The ledger, which was launched in 2012, has facilitated over 4 billion transactions and supports upwards of 7 million wallets, as stated by Ripple. It is sustained by 120 independent validators and does not depend on energy-intensive mining processes.
"We believe there are numerous advantages that tokenization can offer to investors, including enhancements in time and cost efficiency," remarked Jill Barber, chief distribution officer at Aviva Investors, in the release.
"We are dedicated to embracing technological innovations that we believe can drive positive transformations for our business, and we anticipate that tokenized funds can provide significant benefits to our clients,” she added.
Read more: Tokenization still at start of hype cycle, but needs more use cases, specialists say
