Aviva Puts £50m Into Tokenised Sterling Fund on XRPL

Aviva Investors has launched a tokenised share class of its Sterling Liquidity Fund on the XRP Ledger, working with Ripple, and has put £50m ($66m) of its own money into it. The fund holds about £22bn and is the largest the firm runs, Aviva Investors said on Monday 26 October.

It is the London-based asset manager’s second tokenised fund. The first, a share class of its US Dollar Liquidity Fund, went live on the same blockchain in July. Aviva says it now has more than £86m ($116m) invested across the two, which makes it “one of the largest asset management providers of tokenised MMFs in Europe”, citing data from the tracker rwa.xyz.

In brief

Aviva Investors has tokenised a share class of its £22bn Sterling Liquidity Fund on the XRP Ledger, with Ripple, and invested £50m of its own in it.
The fund itself stays off-chain; only investors’ holdings are represented as tokens, under what Aviva calls a “digital twin” model.
On the ledger, the token requires the issuer’s authorisation to hold and can be clawed back, so it is not an open trading asset.

How the sterling token works

The fund is an Ireland-domiciled UCITS money market fund, first launched in 2002, that buys high-grade, sterling-denominated short-term debt and offers daily liquidity. Under the “digital twin” model, Aviva said, “holdings can be represented on-chain while maintaining the integrity of the existing off-chain fund structure”. The underlying assets remain with the fund’s custodian, The Bank of New York Mellon. Token holders get “the same investment objective, risk profile, liquidity characteristics and regulatory protections as the conventional fund”, according to the joint release published by Ripple.

Komainu, a regulated digital asset custodian, and Licuido, a platform that helps fund managers tokenise assets, supported the launch, as they did in July. The share class is open to “eligible investors with digital wallets”. Aviva has not said who qualifies, the minimum investment or the fees.

“We believe tokenised funds can increase efficiency and ultimately lead to improved client outcomes,” said Mark Versey, chief executive of Aviva Investors, in the release, a line The Block also carried. He said the launch “sets the groundwork for a future expansion of our capabilities”. Nigel Khakoo, a senior vice president at Ripple, said: “Markets are moving to 24/7 access and settlement is moving to real-time, always-on rails; this launch shows what that looks like in practice.”

The UK angle is the currency. Aviva Investors is the asset management arm of Aviva plc, the UK insurer, and this fund invests in sterling debt. The tokenised money funds TSN has covered so far, from J.P. Morgan and Franklin Templeton, are dollar funds.

The ledger shows a gated token, not a tradable one

TSN read the issuer’s records directly from the XRP Ledger. The account holds two tokens, labelled “Aviva Investors Sterling Liquidity Fund” and “Aviva Investors US Dollar Liquidity Fund”, both issued in the name of Aviva Investors Liquidity Funds plc. Each carries the same two switches: holders need the issuer’s authorisation, and the issuer can claw tokens back. The setting that would let holders send tokens to one another is off. On the ledger’s rules, that means investors can hold the token and return it to the issuer, but cannot sell it to a stranger.

That is a deliberate design, and a fair one for a regulated fund that must know who owns its shares. It does mean Khakoo’s “24/7 access” describes the rails more than this product. Compare Ripple’s own 24/7 perpetual swaps on real-world assets, which are built to trade.

Aviva’s own money is the base

The other thing to read is the size. The £50m Aviva invested is about 0.2% of a £22bn fund, and Aviva has not said how much outside money, if any, has come into the new class. Other managers have moved bigger sums on the same ledger: Franklin Templeton added about $150m of sgBENJI shares in a single week, and J.P. Morgan has taken two tokenised money funds to Solana. As TSN’s September round-up of tokenised funds showed, the label already covers very different products, from venture funds that are hard to sell to cash funds that redeem in stablecoins.

The ledger shows 50,050,000 units outstanding on each of Aviva’s two tokens, and Aviva has not said what a unit is worth. When that sterling figure moves, it will be the first public sign that someone other than Aviva has bought in.