Abrdn has announced that digital asset exchange, broker and custodian Archax has created a tokenised representation of its interests in the multi-billion Aberdeen Standard Liquidity Sterling Fund.
The Edinburgh-headquartered financial services group stated that this means it has reached a key milestone in its developing digital assets strategy.
Financial Conduct Authority-regulated Archax’s tokens leverage the Hedera Hashgraph distributed ledger technology (DLT), of which abrdn is a governing council member.
It also builds on the investment abrdn made into Archax last year and represents the first step towards a number of tokenisation projects that the parties are collaborating on.
Specifically, abrdn is working towards creating a strategy where digital tokens can be transferred, held and managed on the blockchain.
In time, abrdn will look to use this model across a range of its investment capabilities in particular in private markets where the ability to fractionalise holdings and provide additional liquidity are particularly attractive.
Russell Barlow, global head of alternatives at abrdn, explained: “The focus of our digital asset strategy is on the developing, and long-term, opportunity we foresee as blockchain and other DLTs comes to play a central role in how markets function.
“Our investment in Archax is a key part of this strategy because we believe that the future of financial markets lies with leveraging new technologies, such as Web 3.0 and DLT.
“It is exciting to see a tangible application of Archax’s tokenisation engine working with Hedera and it paves the way for us to look at creating other digital, blockchain-based token investment solutions.”
Graham Rodford, chief executive and co-founder of Archax, said: “Creating a token representation of our interest in such a traditional and institutional-grade vehicle opens up all sorts of interesting opportunities in the digital asset space.
“We are exploring other applications with abrdn to improve access to investment products in this space in the near future.”
The asset manager’s strategy is structured around digital asset infrastructure, including strategic investments and partnerships in key areas of the eco-system that make up this growth market, as well as applying DLT to its existing business.
Stephen Bird, chief executive of abrdn, added: “The potential for assets to be traded via blockchain is significant and this is another step in putting abrdn at the forefront of this new offering.
“And it won’t just be good for us - these huge technological shifts have the power to deliver benefits for all our stakeholders.”
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