KuCoin, a global cryptocurrency exchange, has teamed up with AlloyX, a digital financial infrastructure provider, to test the use of Real-World Asset (RWA) tokens as collateral.
According to the press release, this test starts with the RYT token being added to KuCoin’s Off-Exchange Settlement system, which is used for managing credit. The RYT token is created by a licensed asset management company, and it is backed by the “ChinaAMC USD Digital Money Market Fund.”
This fund is a tokenized product, meaning it has been turned into a digital token that can be traded. It is issued by China Asset Management (Hong Kong) Limited, which is owned by China Asset Management Co., Ltd.
The company was one of the first Chinese asset managers to set up in Hong Kong and offers one of Asia’s earliest tokenized USD funds for retail users. Buyers and sellers can subscribe or redeem directly in token form.
Now that KuCoin is adding RYT as an asset used as collateral for credit lines, token holders can apply for credit directly within their accounts.
Users can also keep earning the yields from the money market fund while holding RYT. They can also combine RYT with other blockchain-based assets to boost their collateral options.
The RYT token’s asset chain is built with compliance in mind. The fund’s money is kept safe, managed, and recorded by Standard Chartered Bank in Hong Kong. This setup adds strong institutional-level protections under traditional financial rules, which can help maintain trust among users.
“KuCoin has always been committed to bridging traditional finance and the crypto world through innovation. This collaboration with AlloyX to explore RWA tokens as collateral mechanisms exemplifies our dedication to providing users with secure and compliant solutions. We emphasize trustworthiness and risk control—this partnership not only elevates the platform’s innovation level but also delivers reliable asset appreciation opportunities to global users, helping them manage digital assets more confidently in dynamic markets.” KuCoin CEO BC Wong said in the press release.
“Our focus has always been on how RWA, as an asset form, can deliver more authentic and sustainable economic functions on-chain. This cooperation with KuCoin is a pragmatic attempt centered on ‘collateral mechanisms and scenario building,’ not only offering users more possibilities for asset utilization but also providing the industry with opportunities for structural validation,” commented AlloyX Co-Founder and CEO Thomas Zhu.
KuCoin stated that it will continue to deepen similar exploratory collaborations to bring more innovative value to users worldwide.
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