Ripple Partners with OpenEden to Tap Tokenized Treasury Market

Ripple is looking to capture a share of the tokenized US Treasury market, currently dominated by Ethereum, as the real-world asset boom shows no signs of slowing down.

The tokenization platform OpenEden announced on Thursday that it will start offering tokenized U.S. Treasury bills (T-bills) on the XRP Ledger (XRPL) for the first time.

OpenEden collects funds from investors to buy short-term U.S. Treasury bills and other reverse repurchase agreements collateralized by Treasuries. These T-bills are converted into digital TBILL tokens stored on the XRPL blockchain.

Anyone who wants to mint these tokens must undergo stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) checks.

“OpenEden has attracted a wide range of institutional clients, including foundations, corporate treasuries, and buy-side funds, contributing to a stable and diversified user base,” said Jeremy Ng, co-founder at OpenEden.

T-bills are short-term debt instruments issued by the U.S. Department of the Treasury. Buyers of T-bills are essentially lending money to the government for a short period, usually a few weeks to a year. These bills are considered one of the safest investments because they’re backed by the full faith and credit of the U.S. government.

Tokenization refers to converting the value or ownership of a physical asset into a digital token that can be easily traded on a blockchain. Instead of holding a traditional T-bill certificate, investors can hold a digital token that represents ownership.

According to data from Dune shared by research firm 21.co., Ethereum dominates the tokenized Treasury space with a 76% market share, supporting a variety of protocols such as Securitize, Ondo Finance, Hashnote, Superstate, and OpenEden, which collectively manage over $1.48 billion in assets. The Stellar blockchain commands a 21% market share, used mainly by Franklin Templeton. Mantle has captured a 1.7% share, while other blockchains like Polygon, Avalanche, and Base each have less than a 0.5% share.

Ripple is also allocating $10 million to OpenEden’s TBILL tokens.

“This is part of a larger fund that Ripple will allocate to tokenized T-bills provided by OpenEden and other issuers,” Ripple said.

OpenEden will allow users to mint TBILL tokens using stablecoins, including Ripple’s USD stablecoin, which is slated to launch later this year.

Real World Asset Boom

The demand for tokenized US Treasury debt and government securities has soared this year, with their market capitalization surpassing $1.8 billion across blockchains like Ethereum, Stellar and Arbitrum.

BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) is the biggest fund holding $521.02 million in tokenized Treasuries. Franklin Templeton’s OnChain U.S. Government Money Fund (BENJI) holds $401.98 million.

Meanwhile, OpenEden’s TBILL has surged 55% in the past 30 days and reached an all-time high of $85 million in assets under management (AUM), as per Dune data. OpenEden launched TBILL in April 2023. The company touts annualized yields of around 5.02%.