Aviva Investors, the global asset management division of UK-based insurer Aviva, has invested £50 million ($66 million) of its own capital in a tokenized share class of its Sterling Liquidity Fund. The tokenized class was launched on the XRP Ledger on October 26, 2026. This move comes after Aviva introduced a tokenized US Dollar Liquidity Fund share class in July 2026, bringing the combined tokenized investment across both fund classes to over £86 million ($116 million).
Tokenization details and fund structure
The Sterling Liquidity Fund, established in Ireland in 2002, manages a total of £22 billion in assets. Only a fraction of this amount—specifically the new share class representing £50 million—has been tokenized. The fund invests in high-quality, sterling-denominated short-term debt instruments and is governed by the European Union’s UCITS regulations, which oversee cross-border investment funds and investor protection.
BNY Mellon serves as the custodian for the fund. The new tokenized share class has been developed in collaboration with Ripple, Komainu, and Licuido. Ripple provides blockchain-based settlement and enterprise solutions, while Komainu and Licuido supply digital asset custody and token management support.
Mini dictionary: UCITS (Undertakings for Collective Investment in Transferable Securities) is a regulatory framework in the European Union that creates rules to protect investors and facilitate the cross-border distribution of mutual funds.
| Fund | Launch Date | Tokenized Value | Total Assets |
|---|---|---|---|
| Sterling Liquidity Fund | Oct 26, 2026 | £50 million | £22 billion |
| US Dollar Liquidity Fund | Jul 29, 2026 | £36 million | Not disclosed |
| Combined Tokenized | £86 million |
How tokenization works—and its current limitations
Aviva describes its approach as a “digital twin” model, where qualified investors can hold tokens representing fund shares in digital wallets, while the actual securities remain off-chain through traditional custodianship. This structure does not impact the fund’s investment strategy, risk profile, or investor protections provided under existing regulation.
Importantly, tokenization does not necessarily make fund shares more easily transferable. For example, Aviva’s earlier US Dollar share class required each blockchain token to match an off-chain fund share, and both digital and traditional ledger entries had to be reconciled daily. This continued reliance on traditional infrastructure has limited the potential benefits in terms of transferability and immediate use as collateral.
Currently, investors have not been able to transfer tokens between different holders, restricting their usage as rapidly movable collateral. Aviva has yet to clarify whether the new sterling share class will operate under the same restrictions.
Holding fund shares as tokens does not automatically result in broader transferability or instant settlement, as legal ownership, procedural restrictions, and reconciliation with existing systems remain central concerns.
The evolving ecosystem and regulatory focus
Ripple executive Nigel Khakoo interprets the tokenized launch as progress toward always-on market access and real-time settlement. Aviva CEO Mark Versey expects operational efficiencies from the deployment of blockchain technology in the investment process.
Despite these aims, concerns persist about legal clarity and the interoperability of tokenized assets with global financial systems. The October 2026 CEPR analysis cautioned that blockchain solutions must still integrate with legacy financial infrastructure. The International Monetary Fund has emphasized the importance of clear legal frameworks and the reliability of both blockchains and off-chain settlement assets.
The European Central Bank has noted the potential for tokenized money-market funds to speed up transactions, while also warning that they could introduce new liquidity and operational risks. The Bank for International Settlements has flagged possible blockchain outages and wallet restrictions as further points of risk.
The Bank for International Settlements and the European Central Bank see both opportunities and risks in tokenized money market funds, highlighting operational and liquidity concerns alongside potential efficiency gains.
A recent paper from ISDA explored the possibility of using tokenized fund shares as collateral in derivatives transactions and has called for feedback from the broader industry on how such assets could be integrated into standard agreements.
Ripple’s ongoing infrastructure investment
Ripple, the enterprise blockchain company behind XRP Ledger, continues to strengthen its tokenization infrastructure. Recent investments in ZILO and Licuido are aimed at improving transfer agency, issuance, and collateral management for tokenized assets on the XRP Ledger.
By reducing manual paperwork and accelerating the movement of cash and collateral, these efforts seek to make tokenized funds more functional for global institutions. The key challenge remains achieving seamless and cost-effective transferability while ensuring compliance and reliability.
