Aviva Investors tokenizes sterling fund share class on XRP Ledger

Aviva Investors and Ripple have placed a tokenized share class of a £22 billion sterling money market fund on the XRP Ledger, with Aviva putting £50 million of its own money into the new class. The two firms announced the launch on October 26.

The class belongs to the Aviva Investors Sterling Liquidity Fund, which has run since 2002 and holds about £22 billion ($29 billion), according to reports from The Block and crypto.news that cited the companies. Not the whole fund. Only the new share class sits on a blockchain, and the fund underneath keeps running the way it always has.

What Aviva put on the blockchain

Aviva tokenized a single share class, not the entire £22 billion fund. The firm seeded that class with £50 million. Everything else about the fund stays off the chain: the short-term bonds it owns, the daily dealing, the rules it must follow. A money market fund like this one holds safe, short-dated debt and aims to let investors pull cash out on any business day.

The arrangement is what the industry calls a digital twin. Ownership of the tokenized shares is recorded on the XRP Ledger, the public blockchain linked to the token XRP, while the real portfolio sits where it always sat. Picture a blockchain receipt for a stake in a fund whose assets never move. Aviva says the tokenized shares carry the same investment goal, risk level, liquidity and regulatory protections as the ordinary version. To hold them, an investor needs an eligible digital wallet. Not an ordinary account.

The firms behind the launch

Several companies sit behind the new class, and the custody setup is deliberately ordinary. BNY Mellon, one of the world's largest custodian banks, still holds the fund's underlying assets. Komainu, a regulated digital-asset custodian, and Licuido, a firm that builds tokenization infrastructure, supported the launch. Ripple has invested in both Licuido and the fund-technology company ZILO, according to The Block.

Nigel Khakoo, Senior Vice President of trading and markets at Ripple, said financial institutions are moving to infrastructure built for round-the-clock access and faster settlement. Mark Versey, chief executive of Aviva Investors, put the pitch plainly. 'We believe tokenized funds can increase efficiency and ultimately lead to improved client outcomes,' he said, adding that Aviva plans to explore more tokenization work with Ripple.

A push that started in July

This sterling launch follows a near-identical move in the summer and a partnership struck in February. On July 29 the two firms tokenized a share class of Aviva's US Dollar Liquidity Fund on the same ledger, a step the Central Bank of Ireland approved and the companies called a regulatory first for fund structures. Across the dollar and sterling classes together, Aviva now has more than £86 million ($115 million) invested.

February's deal was Ripple's first with a European asset manager and Aviva Investors' first move into tokenized funds. Banks and large managers have spent the year shifting pieces of traditional finance onto public chains, from deposit tokens to money market funds. What the companies have not said is how much outside money the sterling class holds. The £50 million is Aviva's own seed. Nothing else, yet.

What to watch

Demand from outside Aviva is the real test now. A £50 million seed from the manager shows the plumbing works. It does not show that pension funds, companies or other buyers want fund shares that live in a digital wallet. Watch for three things: whether third-party money arrives, whether Aviva tokenizes larger or less liquid funds, and whether rivals copy the digital-twin model instead of building products native to a blockchain. For now the sterling fund runs on two tracks. The old one still carries all the weight.