AlloyX Launches Regulated Tokenized Money Market Fund (RYT) on Polygon with Standard Chartered Custody

Executive Summary

AlloyX, a stablecoin service provider, has launched its Real Yield Token (RYT), a tokenized money market fund, exclusively on the Polygon network. This initiative integrates Standard Chartered Bank for custody services, aiming to connect regulated liquidity with programmable finance. The RYT fund is designed to offer institutional-grade yield to stablecoin users within a robust compliance framework, reflecting a strategic move towards bridging traditional finance (TradFi) with decentralized finance (DeFi).

The Event in Detail

The RYT fund, developed by AlloyX, operates on the Ethereum scaling network Polygon, leveraging its stability, low transaction costs, and near-instant finality for on-chain settlement. Standard Chartered Bank, based in Hong Kong, provides the essential custody services and acts as the registrar for the fund. The fund is structured under Cayman Islands law as a private fund share, specifically through Solowin Digital Horizon SP, a segregated portfolio of Solomon Global Select Fund SPC. Each RYT token is fully backed 1:1 by units of the underlying ChinaAMC Select USD Money Market Fund, held in custody by Standard Chartered.

The fund operates on daily cycles with T+1 settlement for the underlying assets, while offering T+0 atomic subscription and redemption for the RYT token on-chain. This allows for immediate on-chain minting or redemption of tokens, with the fund settlement occurring in the background. Selected data related to the fund is published on-chain to ensure transparency. Access to RYT is restricted to KYC-verified, accredited investors and is not available to individuals in the U.S. or Mainland China.

Financial Mechanics of RYT

The RYT token is an ERC-20 compatible asset, designed to behave as a stable, non-rebasing token with a net asset value (NAV) that consistently reflects its underlying stable assets. This structure enables integration with various DeFi protocols for use cases such as collateralization and liquidity provision, all while representing a real-world asset. The mechanism allows for "looping" – supplying tokens as collateral, borrowing against them, and repeating the process – to amplify liquidity and returns within regulatory guidelines, particularly efficiently on Polygon due to its minimal fees and high throughput. The token's backing by a regulated USD Money Market Fund and custody by Standard Chartered aims to provide institutional investors with the compliance and auditability expected from traditional financial products, combined with the speed and composability of DeFi.

Market Implications and Business Strategy

The launch of RYT underscores a growing trend of institutional participation in the digital asset space. It exemplifies the evolving perspective among traditional financial institutions, viewing DeFi as a programmable infrastructure capable of modernizing markets and generating yield. The appeal for institutions is dual: opportunities for yield generation from native staking rewards, tokenized Treasuries, and on-chain liquidity strategies, alongside efficiency gains through real-time settlement, provable solvency, and automated compliance. Polygon's selection as the exclusive network for RYT highlights its increasing importance as a preferred blockchain for global payments and tokenization, attracting major entities like Stripe, Franklin Templeton, Apollo, and BlackRock.

This move by AlloyX, which was recently acquired by Solowin Holdings (SWIN) for $350 million, aligns with Solowin's strategy to expand its digital asset capabilities and activate its global stablecoin strategy across markets including the UAE, ASEAN, and Africa. The acquisition demonstrates significant investment in stablecoin infrastructure, with performance incentives tied to AlloyX's future valuation. The integration of RYT into the broader Web3 ecosystem could set a precedent for further bridging DeFi and TradFi, driving institutional capital into compliant crypto offerings and potentially increasing demand for stablecoins and supporting blockchain infrastructure.

Broader Regulatory Context

The introduction of RYT also reflects Hong Kong's proactive stance in establishing a comprehensive regulatory framework for digital assets. The Stablecoins Ordinance, implemented in August 2025, mandates licensing from the Hong Kong Monetary Authority (HKMA), requires a minimum HKD 25 million capital, and demands 100% reserve asset backing for fiat-backed stablecoin issuers. This regulatory clarity, part of the broader LEAP framework, is designed to balance innovation with investor protection, creating an environment conducive to institutional and retail participation in the digital asset market. Hong Kong's approach, which includes the absence of capital gains tax on crypto profits and tax concessions for tokenized ETFs, differentiates it from other jurisdictions and aims to attract institutional capital towards stablecoins and tokenized real-world assets, with market projections indicating substantial growth in RWA markets.