$1.5T Pension Giant Joins BlackRock, Franklin’s Entry into Crypto Tokenization
Highlights
- L&G is exploring ways to offer its Liquidity funds in tokenized format, aiming to enhance efficiency, reduce costs, and broaden investment opportunities.
- BlackRock's BUIDL fund, launched on the Ethereum blockchain, invests in assets like U.S. Treasury bonds.
- BlackRock seeks to challenge stablecoin market leaders like Circle and Tether by expanding the BUIDL token's market utility.
Legal & General (L&G), the $1.5 trillion London-based pension and investment management firm is the latest financial giant to join the crypto tokenization space joining the likes of other big players such as Blackrock, and Franklin Templeton.
L&G Eyes Major Inroads Into Crypto Tokenization
More and more traditional financial firms are increasingly adopting crypto tokenization, which involves representing traditional like U.S. Treasury-backed money-market funds in the form of tokens on the blockchain network.
With the world’s top asset managers like BlackRock entering this space through its BUIDL fund on the Ethereum blockchain, the overall trend has accelerated. Other major players, such as Franklin Templeton, State Street, and Abrdn, have also launched similar offerings. Speaking on the development, Ed Wicks, global head of trading at Legal & General (L&G) said:
“We are evaluating ways to make the Legal & General Investment Management Liquidity funds available in tokenized format. Digitization of the funds industry is key to improving efficiency, reducing cost, and making a broad range of investment solutions available to a wider range of investors. We look forward to continued progress in this space”.
British pension giant L&G has been dabbling with blockchain technology since 2019. Back then, the insurer stated that it planned to use its managed blockchain system from Amazon Web Services (AWS) which helps it to manage and record bulk annuities for its insurance business.
BlackRock Making Inroads With BUIDL Fund
While stepping into the tokenization space earlier this year in March, the world’s largest asset manager BlackRock launched its BUIDL fund on the Ethereum blockchain network. This fund will invest in cash, debt securities, and US Treasury bonds primarily with the help of the Ethereum blockchain.
This led many top crypto market players like Circle to introduce a smart contract functionality allowing BlackRock BUIDL holders to transfer their shares for the USDC stablecoin.
However, per the latest development, the world’s largest asset manager is trying to challenge Circle and Tether’s stablecoin market dominance. Last week, BlackRock announced its partnership with brokerage firm Securitize for using its BUIDL token on top derivates market platforms like Binance, OKX, and Deribit. This is yet another measure from the asset manager to expand the BUIDL token’s utility in the market.
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