Axiology & VIALET launch tokenised funds for safeguarding

Axiology has partnered with VIALET to enable the use of tokenised money market funds for client fund safeguarding and corporate treasury management. The arrangement gives VIALET access to eligible tokenised funds through Axiology's regulated market infrastructure.

VIALET manages about €150 million in assets and processed €6 billion in gross payment volume over the trailing 12 months. The Lithuanian electronic money institution currently safeguards client funds through credit institution accounts and investment-grade government bonds. The new arrangement adds another way to hold liquid assets.

The partnership addresses a longstanding issue for payment institutions: how to diversify safeguarded assets without reducing access to the cash needed for daily settlements. Money market funds are widely used as short-term investment instruments, but standard redemption cut-off times can make them hard to use when payment flows continue throughout the day and over weekends or evenings.

Axiology said the structure is designed to address that constraint through a separate arrangement with an eligible liquidity provider. Under that setup, VIALET can access cash intraday without changing the funds' underlying redemption terms.

This matters for electronic money institutions because they must protect client balances while meeting strict operational demands. Payment providers often need immediate access to funds to settle transactions, and keeping all safeguarded money in bank accounts can leave them exposed to a narrower set of counterparties.

Growing market

The tie-up comes as tokenised money market funds attract growing attention from institutional investors and market operators. According to the European Central Bank, the global market for tokenised money market funds grew by about 110% in 2025, reaching roughly €7 billion by February 2026.

Supporters of tokenisation argue that putting fund units on distributed ledger infrastructure can widen access and improve how investors move, record and monitor holdings. In practice, regulated users still need structures that fit existing rules on liquidity, custody and safeguarding.

Axiology operates a regulated DLT Trading and Settlement System under the EU DLT Pilot Regime. The framework is intended to let market participants test distributed ledger technology in the trading and settlement of financial instruments under regulatory supervision.

For VIALET, the partnership also keeps the activity within Lithuania's regulatory framework. The company is licensed by the Bank of Lithuania and provides payment accounts, card issuing, card acquiring, and local and international transfers for businesses in regulated industries.

It employs more than 100 people across offices in Vilnius and Riga. The business is also a principal member of Mastercard and Visa, and connects directly to European payment networks.

Safeguarding model

Client fund safeguarding is a core requirement for electronic money institutions, which must segregate customer funds from their own balance sheets. These institutions commonly use bank deposits or hold qualifying secure assets such as government bonds, but both approaches can involve trade-offs between concentration, yield and immediate access to cash.

Tokenised money market funds are now being explored as another option because they may offer diversification while retaining exposure to short-term, high-quality instruments. The challenge has been ensuring these assets can still support same-day or intraday liquidity needs.

Marius Jurgilas, Chief Executive Officer of Axiology, said: "For payment institutions, safeguarding is not just about asset quality. Funds must also be accessible when payments need to be settled. By pairing regulated money market instruments with an intraday liquidity provider under one roof, institutions can diversify their safeguarding arrangements without adding unnecessary operational complexity."

VIALET framed the decision in terms of operational needs as well as local market ties, saying it wanted a structure that combined same-day liquidity, asset quality, regulatory clarity and straightforward operations.

"We set four non-negotiable requirements: same-day liquidity, high asset quality, regulatory clarity and lean operations. Axiology met all four. As a Vilnius-headquartered electronic money institution, we also want to build with Lithuanian innovators and foster the fintech ecosystem we belong to," Mantas Staliūnas, Chief Executive Officer of VIALET, said.