British-based asset manager Baillie Gifford has launched a tokenized fund that uses the Ethereum and Solana blockchains to manage the legal ownership details of a UK-regulated bond fund. This move signals growing institutional interest in blockchain-based asset management beyond cryptocurrencies.
How the tokenized fund works
The fund, which is regulated in Britain, uses tokenization to record ownership of shares on the Ethereum and Solana networks. This enables more efficient transfer and settlement of fund shares, potentially reducing administrative costs and improving transparency for investors. Baillie Gifford, which manages more than £200 billion in assets, is one of the first major traditional asset managers to adopt a dual-blockchain infrastructure for a regulated fund product.
Why Ethereum and Solana were chosen
Ethereum was selected for its established smart contract ecosystem and widespread institutional adoption, while Solana offers higher transaction throughput and lower fees. By using both networks, Baillie Gifford aims to strike a balance between security, scalability and cost-efficiency. The fund’s legal ownership details remain on-chain, but the underlying assets (UK government bonds and corporate bonds) are held off-chain in traditional custody.
Implications for institutional adoption
This launch is an important milestone for the tokenization of assets in the real world. Traditional asset managers have been cautious about blockchain integration due to regulatory uncertainty and operational complexity. Baillie Gifford’s regulated approach could serve as a blueprint for other institutions exploring tokenized funds. It also shows that blockchain networks can coexist with existing financial infrastructure rather than completely replace it.
Conclusion
Baillie Gifford’s tokenized bond fund on Ethereum and Solana represents a practical step towards the mainstream adoption of blockchain technology in asset management. By focusing on the legal ownership details rather than the assets themselves, the fund meets regulatory requirements while benefiting from the efficiencies of blockchain. The development could accelerate similar initiatives by other major asset managers.
Frequently asked questions
Question 1: What is a tokenized bond fund?
A tokenized bond fund uses blockchain technology to digitally record ownership of fund shares. The underlying assets, such as bonds, are held in traditional custody, while ownership records are managed on a blockchain for greater efficiency and transparency.
Question 2: Why did Baillie Gifford choose both Ethereum and Solana?
Ethereum offers a mature smart contract ecosystem and broad institutional support, while Solana offers faster transaction speeds and lower fees. By using both networks, the fund can optimize security and scalability.
Question 3: Is this fund available to private investors?
The fund is regulated in the UK, but specific details of investor suitability have not been disclosed. It is likely to be initially aimed at institutional or accredited investors, although wider availability may follow.