Ripple has made a strategic investment in two companies, Zilo and Licuido, to support the growth of tokenized capital markets. The move is designed to allow tokenized funds to be used as collateral from the moment they are issued.
Why tokenized collateral matters
Tokenized capital markets let traditional assets like bonds or funds be represented on a blockchain. The key innovation here is enabling those tokens to serve as collateral immediately upon issuance. That could speed up settlement and reduce friction in financial markets.
Currently, using a fund as collateral often requires separate steps: the fund is bought, then pledged, then verified. If the token itself carries collateral status from the start, the process becomes simpler and faster. That's the idea behind this investment.
What the investment means
Zilo and Licuido are the firms receiving the investment. Their work focuses on infrastructure for tokenized assets. Ripple's backing signals a bet that this area will grow.
The investment is strategic, meaning Ripple likely sees a role for its own technology in these markets. But the company hasn't detailed how the two firms will integrate with its existing products.
No financial terms were disclosed. Ripple has not said when the investment will close or how the funds will be used. The companies have not commented publicly on the deal.
