L&G brings £50B liquidity funds onchain via Calastone tokenized network

London-based Legal & General Asset Management has made its liquidity funds available in tokenized form through Calastone’s blockchain-based distribution network, enabling investors to access and transfer fund shares via digital infrastructure as an alternative to traditional settlement systems.

According to Wednesday’s announcement, the tokenized share classes are issued with permissioned access, allowing authorized users to buy, hold and transfer them within a regulated environment, while traditional share classes remain available through existing distribution channels.

The funds, denominated in US dollars, euros and British pound sterling, manage more than £50 billion in assets and are designed for capital preservation and same-day liquidity. They invest in high-quality, short-term money market instruments, including government bonds, bank deposits and corporate debt.

Calastone’s network, part of SS&C Technologies, provides infrastructure for token creation, order routing, trade aggregation, reconciliation and onchain settlement, integrated with existing transfer agent and fund administration systems.

Tokenized versions of the funds will initially be issued on Ethereum and other EVM-compatible networks.

Legal & General Asset Management manages about £1.2 trillion in assets across public and private markets, according to the company, while Calastone said its network connects more than 4,500 financial institutions globally.

The move comes as UK regulators work toward a broader crypto framework, with the Financial Conduct Authority consulting on rules covering areas such as custody and trading ahead of a planned 2027 regulatory rollout. 

Related: Ripple teams with Kyobo on South Korea tokenized bond settlement

Tokenized money market funds grow as asset managers expand distribution

Tokenized money market funds are growing as asset managers expand distribution across blockchain networks and trading models.

According to RWA.xyz data, tokenized US Treasury products, including money market funds, have grown to more than $13 billion at the time of writing, up from about $8.9 billion at the start of the year. 

Leading the way is BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) with roughly $2.47 billion in assets, followed by Franklin Templeton’s OnChain US Government Money Fund at about $993 million and WisdomTree’s Government Money Market Digital Fund at approximately $864 million.

In recent months, asset managers have expanded these products across blockchain networks and trading models. 

In November, Franklin Templeton integrated its Benji platform with the Canton Network, extending distribution of its tokenized money market fund to an institutional blockchain environment, while BlackRock expanded BUIDL to the Solana (SOL) blockchain in March.

In February, WisdomTree enabled 24/7 trading and instant settlement for its tokenized money market fund within a regulated framework.

However, as these products expand, they also introduce new challenges. The Bank for International Settlements has warned that mismatches between instant token transfers and slower underlying asset settlement could create liquidity and contagion risks.

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