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Archax makes the abrdn money market fund accessible and transferable on the Algorand blockchain using the Quantoz EURD e-money token
Algorand’s native “code-free” atomic transaction allows for efficient trading without having to rely on smart contract code
BARCELONA, Spain and LONDON and UTRECHT, Netherlands, June 27, 2024 /PRNewswire/ — Today, the Algorand Foundation, ArcadeAND Payments Quantoz announced:
- The first tokenized money market fund has arrived on Algorand following Archax’s issuance of tokenized interests in abrdn 3.8 billion euro money market fund1.
- The integration between Quantoz Payments and Archax enables the use of EURD e-money on the Archax digital asset platform.
- Native “codeless” atomic settlement of the EURD/fund token in secondary market peer-to-peer transactions enables immediate execution of interdependent transactions in a predefined order.
By combining robust tokenized assets, on-chain digital currency, and native atomic settlement, the partners were able to demonstrate the feasibility and efficiency of moving the end-to-end investment and cash settlement process on-chain: investment, asset transfer, trading, settlement, and distributions.
Nick Haasnoot, CEO of Quantoz Payments, comments: “The use of EURD to purchase Money Market Funds in tokenized format is an acceleration to implement more tokenized financial instruments. Delivery Versus Payment via regulated e-money will form the basis of expected broad acceptance of this product, with opportunities for both retail and institutional investors across a variety of assets.”
Graham Rodford, CEO and co-founder of Archax, comments: “There is now real momentum for real-world tokenized assets, and regulated yield instruments, such as money market funds, are at the forefront of this activity the “cash leg” of on-chain settlement has generally proven to be more challenging than the “asset leg” and the use of digital native money, such as EURD, can be an important tool in unlocking the benefits offered by on-chain financial markets. -chain. can bring. We are pleased to work with Algorand and Quantoz to deliver the increased transparency and efficiency that blockchain/DLT offers.”
Russell Barlow, Global Head of Multi-Asset and Alternative Investment Solutions at abrdn, commented: “At abrdn, we are committed to driving digital innovation in investment management and are pleased to see continued progress in this space. This development highlights the importance of institutional infrastructure providers and we congratulate Archax, Quantoz and the Algorand Foundation on this key milestone.”
“The future of finance is truly immediate, including instant finality of transactions. This partnership between Archax and Quantoz to bring both a digital euro and a tokenized fund to Algorand makes this a reality for registered investors across Europe,” said Eric Wragge, Global Head of Corporate Development and Capital Markets at the Algorand Foundation. “The impact of combining tokenized assets and a digital euro is significant, and we look forward to bringing even more innovations like this to Algorand’s institutional-grade, quantum-secure blockchain.”
EURD and Quantoz Payments
EURD, a programmable digital euro from the European Union, is issued on Algorand by Quantoz Payments, a licensed electronic money institution (EMI) and regulated by the Dutch Central Bank. EURDs in issue are more than backed by a 102% surplus of high-quality liquid assets subject to strict Central Bank supervision and held in a remote bankruptcy foundation, Stichting Quantoz. EURDs can be created by sending funds via the SEPA payment network and holders have the right to redeem the face value at any time.
Asset Tokenization and Archax
Archax is headquartered in London and is the first ever company to be authorised by the UK’s Financial Conduct Authority (“FCA”) as a digital securities exchange, custodian and broker-dealer, as well as the first to be listed on the regulator’s Cryptoasset Register. Consistent with these regulatory authorisations and its status as a distributor of abrdn products, Archax is able to a) purchase and hold fund shares in a remote insolvency trust, b) issue Algorand Standard Asset tokens representing beneficial ownership of the underlying fund shares, and c) observe the Algorand blockchain to identify peer-to-peer transfers and changes in ownership. Additionally, given its integration with Quantoz, it is able to accept, distribute and redeem EURD, which can be used to accept deposits, process withdrawals, distribute coupons, interest payments or dividends.
Under Archax’s onboarding process, qualified investors can invest in, hold and trade the range of tokenized products available on Archax’s digital asset platform, which includes access to Archax’s money market funds.
To comply with AML and regulatory requirements, Archax-issued tokens can only be transferred between Archax-authorized wallets.
Transaction orchestration and Algorand
A unique feature of the Algorand blockchain is that the atomic swap functionality — the controlled exchange of assets if and only if all parties fulfill their end of the bargain — is built into the protocol itself and does not require smart contract programming. Algorand atomic swaps enable group transactions to be executed, without counterparty risk and with precise, consensus-enforced ordering of transactions, a key requirement for many types of complex financial workflows.
Additionally, atomic swaps benefit from Algorand’s instant finality, which means that all transactions are final the moment a new block is created (~3 seconds). All interdependent transactions that are part of an atomic swap are guaranteed to be executed in the same block.
Quantoz and EURD Payment Information
Quantoz Payments is incorporated in the Netherlands and is a 100% subsidiary of Quantoz NV Quantoz Payments is an issuer of electronic money in the form of electronic money tokens. The Company holds an electronic money institution (EMI) license from the Dutch supervisory authority, the Dutch Central Bank.
EURD is the e-money token issued by Quantoz Payments. Funds received in exchange for e-money tokens are held by Stichting Quantoz, a remote entity in the event of bankruptcy, which ensures that such funds are safeguarded according to the requirements of MiCAR. The e-money tokens in circulation are 102% overcollateralized. Quantoz Payments and Stichting Quantoz are subject to the prudential supervision of DNB.
Notice: The EURD White Paper will be published on Quantozpay.com. Holders of EURD e-money tokens have the right to redeem at any time at face value, with redemption terms outlined in the EURD White Paper.
About Archax
Archax is a regulated, global digital asset exchange, brokerage and custody, headquartered in London. Founded by experts from the world of financial markets and supported by an expert advisory board, Archax offers a credible bridge between the blockchain-focused crypto community and the traditional investment space. Archax is the first company ever to receive FCA regulation as an exchange, custody and digital brokerage. It was also the first company to be listed on the FCA’s Cryptoasset Register as a VASP (Virtual Asset Service Provider). Archax was specifically designed to allow institutional investors to trade all types of digital assets, from cryptocurrencies to digital securities. It is built using existing, proven, resilient, scalable and high-performance exchange infrastructure, hosted in world-class data center space and integrated into your existing institutional trading workflow. For more information, go to www.archax.com.
About the Algorand Foundation
Algorand’s mission is to power a world where information is whole and innovative ideas can thrive. The Algorand Foundation supports Algorand’s rapidly growing ecosystem by providing a world-class development environment, supporting key infrastructure and defining technical standards, offering comprehensive support to builders and entrepreneurs, and providing the infrastructure for decentralized governance.
Founded by Turing Award-winning cryptographer Silvio Micali in 2019, Algorand has grown into a vibrant ecosystem of developers, entrepreneurs, and enterprise partners who benefit from institutional-grade certainty and resilience, while features like low fees, instant finality, and a minimal carbon footprint also appeal to the protocol’s millions of retail users. Builders of all kinds can use common programming languages like Python to develop advanced apps and protocols that solve important problems on a global scale: instant payments in war zones and disasters, self-sovereign identity for the disenfranchised, supply chain traceability for global trade, permissionless protocols that address financial inclusion, and the creation of entirely new markets through tokenization, to name a few. To learn more and start your Algorand journey, visit algorand foundation.
1 Assets managed as of 30 April 2024, https://abrdn.kurtosysweb.com/pdfs/F_STDI_en-GB-NN_LU0966092131.pdf
SOURCE Algorand Foundation