How is Ripple using DeFi to Affect Aviva’s Funding?

Ripple has teamed up with Aviva Investors for its first collaboration with a European investment management business.

The deal between the two organisations will see tokenised solutions incorporated into Aviva Investors’ existing product offering. 

The partnership is also the first of its kind for Aviva Investors, using a shared vision between the two companies to bring tokenised funds to independent XRP Ledger (XRPL). 

“We’re really delighted to announce our collaboration with Ripple, and we look forward to working closely with the team to explore tokenising solutions," says Jill Barber, Chief Distribution Officer at Aviva Investors. 

"We believe there are many benefits that tokenisation can bring to investors, including improvements in terms of both time and cost efficiency," she adds.

"As the investment arm of the UK’s leading insurer, we have a long track record with regards to innovation.”

What benefits does blockchain hold for Aviva? 

The XRPL is a decentralised open-source blockchain maintained by 120 independent validators.

Its fast and efficient movement of global transactions position it as an ideal candidate for the introduction of tokenised solutions. 

Aviva Investors will utilise the ledger for its reliability, issuing and managing tokenised funds.

Aside from the blockchain transactions providing the advantage of being secure and low-cost, they also require no mining to settle transactions, supporting energy efficiency.

In addition, the features offered by the blockchain include compliance capabilities. These are designed to support financial institutions operating in regulated markets. 

“With its built-in compliance tools, near-instant settlement, and native liquidity, the XRPL provides the secure and scalable infrastructure required to support the next generation of institutional assets," explains Nigel Khakoo, Vice President of Trading and Markets at Ripple.

Why decentralised finance?

Gaining popularity, mainstream financial institutions are picking up the pace when implementing DeFi practices into their product offerings. 

Recently, Lloyds Banking Group announced a UK-first as it used blockchain to purchase a tokenised gilt. 

Nigel also notes how the move to decentralised finance is affecting financial assets.

“Tokenisation is now moving from experimentation to large-scale production," he says.

Institutions like Aviva Investors are now focused on how to deploy regulated financial assets at scale.

The development of tokenised fund structures is one that we believe can bring huge technological efficiencies to the investment sector, and we expect this to take full effect over the next decade.” 

Ripple has already processed four billion transactions since the launch of the network in 2012, and supports more than four million active wallets. 

Ripple’s recently announced partnership with LMAX Group is set to speed up the integration of digital and capital markets.

Ripple’s strategy of accelerating the use of DeFi through partnerships has now expanded to include Aviva Investors, the wealth management arm of insurance giant Aviva. 

Embracing the partnership, Jill expands on how it will serve clients in the age of digital finance.

“We are committed to adopting technological advancements that we believe can bring about positive change for our business, and we think tokenised funds can be hugely beneficial to our clients," she says.