Legal & General (L&G), a $1.5 trillion London-based retirement and investment management company, has stepped into the crypto tokenization space. This move follows other financial giants such as BlackRock and Franklin Templeton. Crypto tokenization involves representing traditional assets in the form of tokens on the blockchain network.
L&G’s Role in Crypto Tokenization
Traditional financial firms’ adoption of crypto tokenization is on the rise. This process enables traditional assets, such as U.S. Treasury-backed money market funds, to be offered as tokens on the blockchain. L&G aims to strengthen its place in the sector with its initiative in this field.
Moves of Other Large Companies
BlackRock, Ethereum 
$2,705 is leading the way in this space by launching the BUIDL fund on blockchain. Other major management firms, including Franklin Templeton, State Street and Abrdn, have launched similar offerings. These developments show that crypto tokenization is gaining momentum in the financial sector.
Ed Wicks, L&G’s head of global trading, noted that the company is considering investment management liquidity funds in tokenized formats. Wicks stated that digitalization of the fund industry will increase efficiency and reduce costs.
“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”. – Ed Wicks, L&G
L&G has been dealing with blockchain technology since 2019. At the time, it stated that it planned to use the blockchain system managed by Amazon Web Services (AWS) to manage and record lump sum annuities in its insurance business.
BlackRock’s Initiatives with BUIDL Fund
BlackRock, the world’s largest asset manager, launched its BUIDL fund on the Ethereum blockchain in March. This fund will invest primarily in cash, debt securities and U.S. Treasury securities via the Ethereum blockchain. BlackRock has partnered with Securitize to increase the on-market usage of the BUIDL token.
This collaboration offers the opportunity to use the BUIDL token on derivative market platforms such as Binance, OKX and Deribit. BlackRock aims to challenge Circle and Tether’s dominance in the stablecoin market.
Franklin Templeton also increased competition in the sector by investing in crypto tokenization with similar steps. The initiatives of these companies accelerate the integration of crypto assets into financial products.
Additionally, other major companies such as State Street and Abrdn are also adding diversity to the market by implementing their own tokenization projects. This mobility aims to provide broader investment solutions for investors.
The move by traditional financial institutions towards crypto tokenization reflects the search for digitalization and innovation in investment strategies. This trend is expected to continue.
The spread of tokenization in the financial sector can enable investors to have more flexible and accessible investment tools. These developments may lead to the digitalization of financial products in the future.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
