A regulated exchange called Archax and the UK investment firm abrdn have tokenized a money-market fund, providing a stablecoin with a yield that can be used as trading collateral. The two businesses are now onboarding clients looking for flexible capital allocation alternatives after launching the institutional-grade token in October. The goal of abrdn, which oversees $626 billion in assets, and Archax, one of the first cryptocurrency companies authorised by the Financial Conduct Authority, is to take advantage of the cost- and operational-saving advantages of representing assets on blockchains.
With a $5,000 minimum purchase requirement, the tokenized tranche of the ABRDN fund may draw in new investors. Chief marketing officer of Archax Simon Barnby stated that there is a $400 million pipeline of potential clients, which includes payment companies and holders of yield-less stablecoins like USDC or USDT. Decentralised finance (DeFi) and tokenization are seeing innovation due to the increased interest rate environment, with a particular emphasis on yield-bearing stablecoins.
Early in the upcoming year, Archax intends to launch trading pairings between the bitcoin (BTC) and the abrdn money-market fund (MMF) token. The companies are investigating the possibility of using the MMF ownership token as security in regulated debt-to-fund transactions starting in 2022. Abrdn sees potential for the token to be used for settlement of tokenized securities and other tokenized funds in the future. The company has a long pipeline of financial goods to tokenize, beginning with the money-market fund.
