Archax, the UK and EU regulated digital asset exchange, custodian, and brokerage, announced the launch of its Pool Token functionality on the Hedera Network. This new functionality facilitates on-chain, multi-asset portfolio or basket creation by putting a range of already tokenised assets into a new token. The range of underlying asset types can be wholly diverse too, from debt to ETPs and ISAs.

The first Pool Token being minted on Hedera will hold equal parts of money market funds from four leading asset managers: Aberdeen, BlackRock, State Street, and Legal & General – effectively creating a natively digital ‘fund of money market funds’. This marks a milestone in the digital transformation of financial markets, offering institutional investors unprecedented flexibility in portfolio build and management.

Pool Tokens represent a shift from traditional mutual funds and ETFs toward a more efficient, composable model of investment management. Unlike legacy structures which are bound by fund share classes, prospectuses, and custodial restrictions; Pool Tokens enable real-time portfolio assembly with instant settlement and reduced intermediary friction, by digitally representing investors’ holdings in the constituent funds.

“This launch represents the launch of unprecedented flexibility in portfolio build and fund creation on-chain,” said Graham Rodford, Archax co-founder and CEO. “By enabling the creation of Pool Tokens, an issuer could come to us to create a natively on-chain portfolio, basket, index or fund. Tokenised portfolios can be assembled, transferred, and managed with speed and flexibility, so we’re eliminating the operational inefficiencies that have long plagued traditional investment structures – all while maintaining regulatory compliance and institutional-grade security.”

This innovation addresses the growing demand for more efficient, cost-effective investment products. Traditional securitisation, while sophisticated, remains costly, complex, and operationally inefficient. Pool Tokens enable the entire securitisation process to become near-instantaneous, composable, and accessible at near-zero cost.

The technology applications extend beyond money market funds to any asset with constituent parts that can be composed together, separated, or further pooled—including funds of funds, ETPs, indices, and structured investment products. This composability allows for financial engineering previously impossible in traditional markets.

This new Pool Token functionality has several benefits:

• Instant Fund Creation: By minting a token, which holds a range of diverse underlying asset types.
• Instant Transfers & Composability: Entire portfolios can be migrated across platforms in seconds without complex paperwork or transfer agents, eliminating traditional friction.
• Pool tokens as collateral: Archax’s Nest network is specifically designed to support the use of regulated digital assets as collateral between institutional counterparties, so can facilitate the same with pool tokens.  This also enables near-instant settlement – reducing market friction.

Recent use cases, including those involving Lloyds Banking Group, Aberdeen Investments, and Archax, demonstrate the transformative potential of tokenised real-world asset pool tokens. These innovative digital representations of pooled assets, like money market fund tokens, gilt pool tokens, and other assets, have successfully been deployed as collateral for foreign exchange (FX) trades.

Archax’s comprehensive tokenisation platform, which can be white labelled, supports the creation and management of various pool token structures, enabling institutional counterparties to utilise a broad spectrum of tokenised pool assets as collateral. These include fund pool tokens, equity basket tokens, commodity pool tokens, and other real-world asset pool tokens that represent diversified holdings, rather than single assets.

Source: Archax