Securitize, a platform focused on the tokenization of real-world assets, has introduced a new tokenized fund. This fund is designed to provide investors with onchain access to collateralized loan obligations (CLOs) that hold a AAA rating.
The development of this fund is a collaborative effort with the global investment bank BNY Mellon. According to an announcement made on Wednesday, BNY Mellon will be responsible for the custody of the fund's underlying assets. Additionally, a subsidiary of BNY Mellon will manage the fund's investment portfolio.
Securitize and BNY Mellon intend to bring AAA-rated floating-rate credit onto the blockchain, a market where global CLO issuance has surpassed $1.3 trillion.
Grove, an institutional-grade credit protocol, has indicated its intention to anchor the fund with a $100 million allocation, pending governance approval within the Sky Ecosystem.
Tokenization is the process by which real-world assets, such as stocks, real estate, or debt, are converted into digital tokens that are recorded on a blockchain.
Securitize CEO Carlos Domingo stated that this launch represents "a major step in making high-quality credit more accessible, efficient, and transparent through digital infrastructure."
This announcement follows remarks 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 special-purpose acquisition company, Cantor Equity Partners II, Inc.
Surge in Tokenization of Financial Products
The tokenization of real-world assets is experiencing accelerated growth. According to RWA.xyz, over $35.5 billion is currently represented onchain. This expansion is moving beyond initial applications to encompass a wider array of traditional financial instruments.
In January, Ondo Finance announced its intention to launch a tokenized US Treasury Fund on the XRP Ledger. This initiative aims to allow investors to gain exposure to institutional-grade government bonds, with the option to redeem their holdings using stablecoins. The fund became operational in June.
In July, Grove collaborated with Centrifuge, a blockchain infrastructure platform, to introduce two tokenized Janus Henderson funds on the Avalanche blockchain.
During the same month, Centrifuge partnered with S&P Dow Jones Indices to tokenize the S&P 500 Index. This marked the first instance of the benchmark index being brought onto the blockchain.