KuCoin Tests RYT Token as Collateral with AlloyX to Boost Liquidity and Security

KuCoin, one of the world’s leading cryptocurrency exchanges, has partnered with AlloyX, a digital financial infrastructure provider, to test the use of tokenized real-world assets (RWA) as collateral on its platform. The collaboration marks a significant step toward bridging traditional finance and blockchain technology, with the first asset tested being the RYT token, backed by the ChinaAMC USD Digital Money Market Fund [1]. This initiative aims to explore how tokenized assets can be integrated into credit systems, enhancing security, liquidity, and usability for users.

The RYT token is a digital representation of a USD-denominated money market fund issued by China Asset Management (Hong Kong) Limited, a subsidiary of China Asset Management Co., Ltd. The fund is tokenized, allowing for direct subscription and redemption in digital form, offering users both flexibility and yield-generating opportunities [2]. By adding RYT to its Off-Exchange Settlement system, KuCoin enables token holders to use it as collateral for credit lines, allowing them to access liquidity without having to liquidate their assets [3].

This pilot project is not merely a technical exercise but a strategic move to validate the role of RWAs in decentralized finance (DeFi). The token’s asset chain is designed with compliance and institutional safeguards in mind, with Standard Chartered Bank in Hong Kong overseeing the fund’s safekeeping, management, and record-keeping [4]. This level of institutional support is critical in fostering user trust and ensuring adherence to traditional financial regulations.

KuCoin CEO BC Wong emphasized the platform’s commitment to innovation and compliance, stating that the partnership with AlloyX exemplifies their goal of delivering secure and trustworthy solutions to global users. AlloyX CEO Thomas Zhu added that the collaboration is a practical attempt to explore the economic functions of RWAs on-chain, offering new opportunities for asset utilization and structural validation in the crypto industry [5].

The partnership aligns with a growing trend in the crypto space, where platforms are increasingly integrating tokenized assets to meet the demand for hybrid financial products. By leveraging RWAs, KuCoin is not only expanding the scope of collateral options for its users but also enhancing the platform’s ability to manage digital assets in a secure and efficient manner [1].

The initiative is currently in a testing phase, with results potentially shaping the broader adoption of tokenized collateral in DeFi. If successful, it could pave the way for a wider range of RWA-backed assets to be used in credit and trading systems, further blurring the lines between traditional and digital finance [3]. KuCoin has stated its intention to continue exploring similar collaborations, aiming to bring innovative value to its global user base.

This effort underscores the evolving role of crypto platforms in facilitating the tokenization of real-world assets, with potential implications for the future of asset management and financial services. As the industry continues to mature, such partnerships may become central to the development of a more integrated and accessible financial ecosystem [5].

Source:

[1] BlockchainReporter. KuCoin And AlloyX Pilot RYT, a ChinaAMC Tokenized USD Money-Market Fund, as Credit Collateral on Its Platform. https://blockchainreporter.net/kucoin-and-alloyx-pilot-rwa-collateral-mechanism-adding-chinaamc-backed-ryt-to-credit-lines/

[2] KuCoin Teams Up with AlloyX to Test RWA Tokens as Collateral. https://www.cryptotimes.io/2025/08/13/kucoin-teams-up-with-alloyx-to-test-rwa-tokens-as-collateral/

[3] KuCoin. KuCoin Partners with AlloyX to Explore RWA Token Collateral Mechanism Innovation, Enhancing User Asset Security and Liquidity. https://www.kucoin.com/blog/en-kucoin-partners-with-alloyx-to-explore-rwa-token-collateral-mechanism-innovation-enhancing-user-asset-security-and-liquidity

[4] Big Newsnetwork. KuCoin Partners with AlloyX to Explore RWA Token Collateral Mechanism Innovation, Enhancing User Asset Security and Liquidity. https://www.bignewsnetwork.com/news-wire/prnewswire

[5] Interactive. KuCoin Partners with AlloyX to Explore RWA Token Collateral Mechanism Innovation, Enhancing User Asset Security and Liquidity. https://aijourn.com/electric-cars-are-the-future-vinfast-wants-to-make-owning-one-effortless/