UK-based asset manager Baillie Gifford has launched a tokenized fund that leverages the Ethereum and Solana blockchains to manage on-chain legal ownership records for a UK-regulated bond fund. The move signals growing institutional interest in blockchain-based asset management beyond cryptocurrencies.
How the tokenized fund works
The fund, which is regulated in the UK, uses tokenization to record ownership of shares on the Ethereum and Solana networks. This allows for more efficient transfer and settlement of fund shares, potentially reducing administrative costs and improving transparency for investors. Baillie Gifford, which manages over £200 billion in assets, is among the first major traditional asset managers to adopt 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 balance security, scalability, and cost-efficiency. The fund’s legal ownership records remain on-chain, but the underlying assets—UK government bonds and corporate debt—are held off-chain in traditional custody.
Implications for institutional adoption
This launch is a significant milestone for real-world asset tokenization. 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 demonstrates that blockchain networks can coexist with existing financial infrastructure rather than replace it entirely.
Conclusion
Baillie Gifford’s tokenized bond fund on Ethereum and Solana represents a practical step toward mainstream adoption of blockchain technology in asset management. By focusing on legal ownership records rather than the assets themselves, the fund navigates regulatory requirements while benefiting from blockchain efficiency. The development may accelerate similar initiatives from other large asset managers.
FAQs
Q1: What is a tokenized bond fund?
A tokenized bond fund uses blockchain technology to record ownership of fund shares digitally. The underlying assets, such as bonds, are held in traditional custody, while the ownership records are managed on a blockchain for greater efficiency and transparency.
Q2: Why did Baillie Gifford choose both Ethereum and Solana?
Ethereum offers a mature smart contract ecosystem and broad institutional support, while Solana provides faster transaction speeds and lower costs. Using both networks allows the fund to optimize for security and scalability.
Q3: Is this fund available to retail investors?
The fund is UK-regulated, but specific investor eligibility details were not disclosed. It is likely targeted at institutional or accredited investors initially, though broader availability may follow.
