Ripple has announced a $10 million investment in tokenized U.S. Treasury bills (T-bills) on the XRP Ledger, marking the first time these financial instruments will be available on the blockchain platform.
This groundbreaking move aligns with global regulators' experimentation with tokenization across various financial sectors, including fixed income and asset management. The T-bills will be issued as TBILL tokens by the tokenization platform OpenEden, according to a Thursday release.
The assets backing the TBILL tokens will be invested in short-dated U.S. Treasuries and reverse repurchase agreements (repos) collateralized by U.S. Treasuries. Repos are securities sold with an agreement to repurchase them at a higher price at a specified future date.
The tokenization of real-world assets and traditional financial securities is an expanding sector within the crypto industry. This approach allows for the issuance, management, and distribution of traditional assets in a manner considered more efficient than off-chain methods.
Major players are entering this space. In March, BlackRock, the world’s largest fund manager by assets under management, launched its USD Institutional Digital Liquidity Fund on the Ethereum blockchain, backing it with U.S. Treasury bills, repo agreements, and cash.
Ripple’s $10 million allocation is part of a larger fund the company plans to invest in tokenized T-bills provided by OpenEden and other unspecified issuers. The release did not specify the dates for the fund’s allocation.
XRP Ledger (XRPL) is an open-source blockchain that uses the cryptocurrency XRP to facilitate global financial transfers and currency exchanges.
Ripple has also been actively involved in CBDC development, working with over 20 central banks worldwide, including in Bhutan, Palau, Montenegro, Colombia, and Hong Kong. The company’s vice president, James Wallis, previously highlighted the cost-effectiveness of CBDCs in providing financial services and their ability to streamline payments and credit access.