[NEWS] UK pension giant L&G considers tokenizing fund

It has been revealed that L&G (Legal & General), a UK-based insurance, pension and investment management company, is aiming to realize the tokenization of its fund within the next few months. On the 21st, the US cryptocurrency (virtual currency) media The Block reported.

L&G is the world's largest asset management company with $1.5 trillion (about 225 trillion yen) in assets under management. If L&G is successful in its plan to enter the cryptocurrency industry, it could have a positive impact on the market.

Ed Wicks, global head of trading at LGIM (Legal & General Investment Management), confirmed that the company is currently in the process of considering how to create a tokenization of the fund.

"The digitalization of the fund industry is key to improving efficiency, reducing costs and making a wide range of investment solutions available to a wide range of investors," he told The Block. He added, "We look forward to continued progress in this area."

It is worth noting that this is not L&G's first foray into the blockchain industry. In fact, the company's involvement with blockchain began in 2019. At the time, L&G was considering using AWS's blockchain system to manage and record lump-sum annuities for its insurance business.

Tokenization of real assets (RWA) is gaining attention among traditional financial service providers. This means that traditional assets such as MMFs (money market funds) backed by U.S. Treasury bonds are represented by tokens on the blockchain. Furthermore, the world's largest asset management company BlackRock has sold a Bitcoin spot ETF, and traditional financial institutions are accelerating their entry into the cryptocurrency industry, making tokenization a valuable business.

Major asset management companies are increasingly using tokens

BlackRock is also planning to launch a tokenized investment fund. The fund, named the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), is seeking a minimum investment of $100,000 (approximately 15 million yen) from external investors.

BlackRock has sold an Ethereum spot ETF, clarifying its stance on blockchain to investors. The milestone is that in just four months, BUIDL's assets under management have exceeded $550 million.

About a month after BlackRock developed BUIDL, Franklin Templeton, one of the world's largest asset management companies, announced the launch of the $380 million "Franklin On-Chain U.S. Government Fund (FOBXX)." The fund was tokenized as BENJI on both the Polygon (POL/formerly MATIC) and Stellar (XLM) blockchains.

More recently, State Street, a major U.S.-based financial services company, has launched a tokenized bond and money market fund.

Reference: The Block
Image: Shutterstock

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