Ripple is taking a strategic step into the growing field of tokenized real-world assets (RWAs) with a $5 million investment in Abrdn’s Lux fund, further strengthening its presence on the XRP Ledger (XRPL). This move is part of Ripple’s broader strategy to explore the tokenization of traditional assets, providing a unique opportunity for blockchain integration with financial markets.

In the past 24 hours, XRP outperformed Bitcoin and other major cryptocurrencies, gaining 6% and peaking at $1.49 before slightly retracting as the overall market experienced a pullback. Over the past week, XRP has seen a 27% increase, and it has more than doubled in value over the past two weeks, driven by several key developments in the market.

The collaboration between Ripple, Archax, and Abrdn introduces the U.S. dollar Liquidity Fund (Lux) in tokenized form on the XRP Ledger, marking a first for the network. Archax, a regulated crypto broker and custodian, will make the fund available on the XRPL, offering an innovative way for investors to access short-term, high-quality debt instruments through tokenization. Ripple’s $5 million allocation to this fund is part of its larger initiative to diversify into RWAs, a rapidly growing sector in the cryptocurrency space.

Tokenization of RWAs refers to the process of converting physical and financial assets like real estate, bonds, and commodities into blockchain-based tokens. This process opens up opportunities for fractional ownership, increased liquidity, and the easier transfer of assets, all of which have the potential to revolutionize the way traditional assets are traded and managed.

Lux, which manages over $3.8 billion in assets, has been using Ripple’s digital asset custody services since 2022. The introduction of the tokenized money market fund on the XRP Ledger is expected to further enhance the growth of RWA tokenization, a sector many experts believe will play a crucial role in the future of both the blockchain and financial industries.

In fact, according to McKinsey & Company, the tokenized asset market could reach as much as $4 trillion by 2030 in an optimistic scenario. Other forecasts, such as those from Boston Consulting Group and 21Shares, predict that tokenized assets could surpass $10 trillion by the end of the decade. Ripple’s $5 million investment into Abrdn’s Lux fund is a clear indicator that the company intends to be at the forefront of this innovative financial sector.