Aviva invests £50m in tokenized sterling fund shares on XRP Ledger

Aviva Investors is offering tokenized shares of its £22 billion Sterling Liquidity Fund on the XRP Ledger, with £50 million invested in the new share class announced Oct. 26.

The underlying fund keeps its mandate: it still invests in UK sterling short-term, investment-grade debt securities, held by BNY Mellon. Certain investors can now hold their units in digital wallets on the XRP Ledger. Aviva calls the structure a "digital twin" — tokens represent an interest in the fund — and says the tokenized shares carry the same investment objectives, risks, features and protections as shares of the underlying fund.

For advisors weighing a tokenized cash vehicle, the structure splits custody in two: BNY Mellon holds the fund's underlying securities, and Komainu provides regulated custody for the digital tokens. Operational due diligence now runs past the portfolio to the token custodian, the wallet arrangements and the ledger where units are recorded, even though Aviva says the investment protections match the conventional shares.

BNY Mellon and Ripple said BNY's digital asset custody platform supports XRP and RLUSD and BNY plans to widen support for tokenized investment products on the XRP Ledger, subject to final BNY and regulatory approvals. The announcement came a day after the Aviva launch. BNY Mellon holds the Aviva fund's underlying assets. The ledger has also been collecting tokenized fund assets: Franklin Templeton added $150 million of sgBENJI to the XRP Ledger on Oct. 24, as Digital Capital Daily previously reported.

Across its sterling and US dollar tokenized share classes, the firm says combined investment exceeds £86 million. The £50 million in the sterling class is about 0.23% of the £22 billion fund.

Aviva has been exploring tokenization since 2024 and has accelerated the work as institutional interest in tokenized products grew. It describes the benefits as operational: simpler fund ownership, more transparency, tamper-resistant recordkeeping and settlement, and links between traditional products and digital markets. Money-market funds are well placed to benefit, according to Aviva.

The program involves BNY Mellon as custodian of the underlying assets, Komainu for regulated digital-token custody, Licuido for tokenization and Ripple as technology partner, with shares issued on the XRP Ledger. Alastair Sewell, a senior investment director, told Financial News that Aviva Investors intends to tokenize additional funds, with money-market funds the near-term priority.