Tokenizing TradFi: Abrdn Asset Manager and Archax Crypto Exchange Compete for Pole Position in the Race

U.K.-based investment firm abrdn and the regulated exchange Archax have been at the forefront of introducing a high-caliber token that signifies ownership in a money-market fund. This innovative token, powered by the Hedera Hashgraph system, not only functions as a stablecoin generating yields but also serves as collateral for various trades. With a low entry point of $5,000, it has garnered attention from a wide array of clients, ranging from payment firms to individuals holding stablecoins like USDC or USDT that yield no returns.

Archax, a Financial Conduct Authority-regulated exchange, is gearing up to launch trading pairs involving the abrdn money-market fund (MMF) token and bitcoin (BTC) in the upcoming year. This forward-thinking approach enables users to trade bitcoin against U.S. dollar MMF tokens, providing a new level of flexibility in allocating capital. Moreover, the collaborative efforts of the two entities are exploring the potential use of the MMF ownership token as collateral within the realm of regulated decentralized finance (DeFi), marking a groundbreaking venture within traditional financial markets.

The somewhat diminished DeFi universe is interesting, but it’s just a speck on the landscape compared with the scale of traditional markets.

As the momentum of tokenization continues to build, this partnership aims to capitalize on the benefits offered by blockchain representation, unlocking operational efficiencies and cost-saving measures. Although the decentralized finance sector is still in its infancy, the entities involved acknowledge its potential, envisioning the MMF ownership token as collateral for activities such as margin trading and settling tokenized securities.

Abrdn, a financial giant managing assets totaling $626 billion, perceives this undertaking as a stepping stone towards tokenizing a diverse range of financial products, with a keen focus on meeting the demands of cryptocurrency-native investors. Duncan Moir, the alternative investments leader at Abrdn, underscores the strategic decision to commence with a stablecoin replacement, leveraging its straightforward nature and existing market demand. The collaboration between abrdn and Archax serves as a testament to the ever-evolving landscape of tokenization, showcasing the integration of traditional finance with the innovative prospects presented by blockchain technology.

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