Baillie Gifford Launches Tokenized Bond Fund on Ethereum, Solana With BNY

Baillie Gifford, a century-old investment firm in Scotland, is entering the tokenization space via its latest collaboration with BNY. The tokenized bond fund is built on the Ethereum and Solana blockchains.

Notably, the new product provides investors with access to a short-duration corporate bond strategy through blockchain-based ownership. Thus, it marks another major development in the growing intersection of blockchain technology and traditional finance (TradFi), especially through tokenization.

Baillie Gifford brings bond fund on-chain via Ethereum, Solana

Investment firm Baillie Gifford has debuted a tokenized fixed-income fund on Ethereum and Solana. This strategic move comes in partnership with the global custody behemoth, BNY. Via the mentioned blockchain platforms, eligible investors will be able to gain access to a portfolio of corporate bonds through tokenized fund ownership.

Theo Golden, the Head of Digital Assets and Tokenization at Baillie Gifford, stated:

Interestingly, the Baillie Gifford Enhanced Yield Fund (BAGEY) is a dollar-denominated product. It is structured as a UK-regulated Open-Ended Investment Company (OEIC). As per the project, BNY will support its blockchain infrastructure and provide tokenization and digital wallet services.

The fund currently offers a yield of around 7%. It is available to investors in the UK, Switzerland, and the Cayman Islands. However, the fund will be subject to local regulations in these countries.

RWA tokenization moves to real-world use

It is worth noting that Baillie Gifford’s tokenized bond fund launch comes amid the growing hype surrounding real-world asset tokenization. While it began just as a crypto experiment, it has now turned into a critical strategy that banks, asset managers, and other traditional financial giants embrace.

BNY’s Katey Neate stated:

Wall Street behemoths like JPMorgan, Morgan Stanley, BlackRock, and many more have already experimented with their own tokenized funds. Asset manager BlackRock was one of the first TradFi firms to launch a tokenized money market fund, called BUIDL.

Morgan Stanley sees on-chain finance as critical in the company’s strategy. Sharon Yeshaya, the chief financial officer, noted,

Another major development within the RWA tokenization space is the upcoming public listing of major tokenization platform Securitize. As CoinCodex reported recently, the SEC has approved a key registration filing that could potentially lead to the company’s IPO.