In Brief
- Securitize has launched a tokenized fund offering investors on-chain access to AAA-rated collateralized loan obligations (CLOs).
- The initiative is a collaboration with global investment bank BNY Mellon, which will provide custody and asset management services.
- This move aims to bring $1.3 trillion in global CLO issuance onto the blockchain, enhancing accessibility and transparency of high-quality credit.
- Grove, an institutional credit protocol, plans to allocate $100 million to the fund, pending governance approval.
Securitize, a prominent platform for tokenizing real-world assets, has introduced a new tokenized fund designed to grant investors access to AAA-rated collateralized loan obligations (CLOs) directly on the blockchain.
This significant development is being undertaken in partnership with BNY Mellon, a globally recognized investment bank. According to an announcement made on Wednesday, BNY Mellon will be responsible for safeguarding the fund’s underlying assets, while a subsidiary of the bank will manage the fund’s portfolio.
With the global issuance of collateralized loan obligations already exceeding $1.3 trillion, Securitize and BNY Mellon aim to bring this class of AAA-rated, floating-rate credit onto the blockchain, making it more accessible through digital infrastructure.
Grove, an institutional-grade credit protocol, has indicated its intention to anchor the fund with an allocation of $100 million, pending the necessary governance approval within the Sky Ecosystem.
Tokenization involves the process of converting real-world assets, such as stocks, real estate, or debt, into digital tokens that are then recorded on a blockchain.
Securitize CEO Carlos Domingo remarked that this launch represents a major step in making high-quality credit more accessible, efficient, and transparent through digital infrastructure.
This announcement follows recent comments made by Domingo to CNBC on October 28th, where he disclosed Securitize’s plans to become a publicly traded company through a merger with the blank-check company Cantor Equity Partners II, Inc.
The Growing Trend of Financial Product Tokenization
The tokenization of real-world assets is experiencing a notable acceleration. Data from RWA.xyz indicates that over $35.5 billion is currently represented on-chain. This trend is increasingly encompassing a wider array of traditional financial instruments beyond initial applications.
In January, Ondo Finance announced its plan to launch a tokenized U.S. Treasury Fund on the XRP Ledger. This initiative was designed to offer investors exposure to institutional-grade government bonds, with the added flexibility of redeeming holdings via stablecoins. The fund officially went live in June.
In July, Grove collaborated with Centrifuge, a blockchain infrastructure platform, to introduce two tokenized funds from Janus Henderson on the Avalanche blockchain.
Later that same month, Centrifuge partnered with S&P Dow Jones Indices to tokenize the S&P 500 Index. This marked a significant milestone, as it was the first instance of the widely recognized benchmark index being brought onto the blockchain.
Expert Summary
Securitize, in partnership with BNY Mellon, has launched a tokenized fund providing on-chain access to AAA-rated CLOs, significantly expanding the reach of traditional finance assets into the digital realm. This move underscores the growing trend of tokenization and its potential to enhance efficiency and accessibility in credit markets.