Aviva tokenizes US Dollar Liquidity Fund on XRP Ledger

Aviva Investors has launched a tokenized share class of its US Dollar Liquidity Fund on the XRP Ledger after receiving approval from the Central Bank of Ireland. The tokenized shares are available to eligible investors who hold compatible digital wallets.

The tokenized share class follows the same investment objective and liquidity profile as the conventional fund. The fund invests in high-grade, short-term US dollar-denominated debt securities and money market instruments issued by governments, banks and corporations.

Aviva Investors confirmed that the fund’s underlying assets will remain with custodian BNY Mellon. Komainu will provide custody for the digital assets and Licuido will supply the tokenization infrastructure. Ripple’s XRP Ledger will be used to issue and manage the tokens, reflecting a partnership Aviva Investors announced with Ripple earlier this year.

Aviva framed the tokenized share class as an alternative share wrapper rather than a change to how the fund is managed. Day-to-day custody of cash and securities will continue under existing arrangements with BNY Mellon. Access to the tokenized class is restricted to investors who meet eligibility requirements and can receive tokens in digital wallets.

Regulatory approval from the Central Bank of Ireland enabled issuance of the share class on a public blockchain. The launch follows earlier tokenization activity on the XRP Ledger, including a 2024 issuance of a US dollar liquidity fund by another manager. Asset managers such as BlackRock, Franklin Templeton and Apollo have also introduced tokenized funds on various blockchains in recent years.

The structure preserves traditional custodial and fund administration roles while using blockchain technology to represent fund shares. Proponents of tokenized funds say the format can allow settlement on distributed ledgers and give investors an alternative way to hold shares, subject to eligibility and custodial arrangements.