Aviva Investors has launched a tokenized share class of its £22 billion Sterling Liquidity Fund on the XRP Ledger, placing £50 million into the new vehicle as it expands its use of blockchain-based fund distribution. The launch gives eligible holders a digital representation of shares in an established sterling money market fund while keeping the underlying portfolio and fund operations within its existing regulated structure.
The £50 million commitment, equivalent to about $66.7 million, takes Aviva Investors’ total allocation across its tokenized liquidity fund share classes above £86 million, or $114.8 million. The firm’s first tokenized offering, a share class in its U.S. dollar liquidity fund, launched on July 29 after approval from the Central Bank of Ireland.
Ripple, the blockchain payments company behind the XRP Ledger ecosystem, is working with Aviva Investors on the rollout. The arrangement follows an earlier disclosure that the firms planned to bring selected traditional investment funds onto the ledger.
A sterling money market fund gains an onchain share class
Aviva Investors’ Sterling Liquidity Fund was established in 2002 and has approximately £22 billion in assets. The Ireland-domiciled UCITS money market fund invests in high-grade, sterling-denominated short-term debt instruments and provides daily liquidity.
UCITS, or Undertakings for Collective Investment in Transferable Securities, is the European regulatory framework used for many retail and institutional investment funds. Its rules cover areas including diversification, disclosures, custody and liquidity management.
The new share class is intended to retain the conventional fund’s investment objective, risk profile, liquidity terms and regulatory protections, according to Aviva Investors. BNY Mellon acts as custodian for the fund assets, while digital asset custodian Komainu and digital infrastructure platform Licuido also supported the deployment.
The structure uses what Aviva Investors describes as a “digital twin” model. Shares in the new class are represented on the XRP Ledger, but the fund’s portfolio remains managed offchain through the established fund framework. Eligible holders need a compatible digital wallet to access the tokenized class.
That design places blockchain technology at the ownership and distribution layer rather than moving the fund’s cash, debt securities and portfolio administration entirely onto a public network. It could appeal to asset managers seeking programmable digital fund units without rebuilding the legal and operational systems that sit behind a regulated money market product.
Tokenization moves beyond blockchain-native products
The launch adds another regulated, sterling-denominated cash-management product to the expanding market for tokenized real-world assets. Tokenization typically refers to recording ownership of a financial asset, such as a fund share, bond or Treasury instrument, in a blockchain-based token.
Money market funds have become a prominent use case because their portfolios consist of relatively simple, short-term instruments and their shares are often used to manage uninvested cash. A tokenized share class can potentially connect those products with digital-wallet infrastructure, automated compliance checks and blockchain-based transfer processes.
The operational benefits depend heavily on the rules governing the individual fund. Daily liquidity in a conventional money market fund does not automatically mean round-the-clock blockchain redemption or instantaneous settlement. Investors and distributors would need to follow the dealing timetable, eligibility requirements and transfer controls set by Aviva Investors and the fund’s service providers.
The XRP Ledger is a public blockchain associated with payments and tokenized asset issuance. In this case, it provides the network on which the digital representation of the fund shares is recorded. The fund itself remains governed by its Irish UCITS structure, with traditional service providers continuing to perform custody and operational roles.
That division of responsibilities is likely to be central for regulated asset managers entering tokenization. Rather than asking clients to choose between conventional fund protections and blockchain access, the digital-twin approach aims to combine a familiar regulated wrapper with a new method of holding and transferring eligible shares.
Wallet access adds a new distribution requirement
The use of a digital wallet changes how clients interact with the fund, even if the investment strategy itself remains unchanged. Access is restricted to eligible wallet holders, meaning onboarding, identity checks and wallet controls become part of the distribution process.
For professional market participants, this could make wallet infrastructure as relevant as conventional fund-account administration. Institutions considering tokenized fund shares need processes for custody, permissions, private-key security and internal authorization, alongside the usual assessment of yield, credit quality, fees and liquidity terms.
Komainu’s participation points to the importance of regulated digital-asset custody in that setup. A tokenized fund share may be held and transferred through blockchain infrastructure, but large financial institutions generally require controls over who can authorize transactions and how assets are recovered or safeguarded if credentials are compromised.
The £50 million allocation also gives Aviva Investors immediate scale in the sterling share class rather than leaving it as a purely technical pilot. Combined with the earlier U.S. dollar offering, the firm now has tokenized products addressing two major liquidity-management currencies.
A measured test for blockchain fund distribution
Aviva Investors’ approach is more evolutionary than disruptive. The underlying fund remains a long-running sterling liquidity vehicle, its assets stay with BNY Mellon, and the tokenized class carries the same stated investment mandate and risk framework as the conventional version.
The practical test will be whether eligible institutions use the tokenized format for treasury management, collateral workflows or fund distribution rather than treating it solely as an alternative recordkeeping system. Activity in the new class, the ease of wallet onboarding and the ability of service providers to manage transfers within regulatory controls will determine how widely the model can be used.
For now, the launch extends tokenization from a U.S. dollar fund share class to a substantial sterling money market product, giving Aviva Investors a second regulated liquidity fund format built for blockchain-based ownership.
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