Private equity firm Aurum Equity Partners said Tuesday it is launching a $1 billion tokenized equity and debt fund on the XRP Ledger (XRP) network, an enterprise-focused blockchain closely associated with Ripple.
The fund focuses on investments in data centers across the U.S, United Arab Emirates, Saudi Arabia, India, and Europe, and it is claimed to be the “world’s first combined equity and debt tokenized fund,” according to the press release.
The fund leverages tech by San Francisco-based tokenization service provider Zoniqx to create security tokens of the underlying financial instruments.
The issuance marks a milestone for XRP Ledger and development firm Ripple Labs’ newfound ambition to claim a share of the booming real-world asset (RWA) tokenization space. Institutional investors are increasingly placing traditional financial products like bonds, credit and equity on blockchain rails in pursuit of operational efficiency gains and speedier around-the-clock settlements. The RWA market could grow to trillions of dollars over the next years, various reports from McKinsey, BCG, 21Shares and Bernstein estimated.
Ripple is also awaiting approval from New York state regulators to launch its U.S. dollar stablecoin, which would play a key role to improve liquidity and support institutions to tokenize and settle financial assets on the XRPL network, Ripple Labs President Monica Long said last week at the company’s annual Swell conference.
“Tokenizing private equity is another emerging use case in RWA, tackling the challenges of illiquidity and limited access in these markets,” said David Schwartz, chief technology officer of Ripple and co-creator of the XRP Ledger. “By using XRPL’s ability to process transactions efficiently and securely, Aurum and Zoniqx are showing how real-world assets can be managed more effectively harnessing a decentralized blockchain.”