UK Pension Powerhouse L&G Ventures Boldly into Crypto Tokenization Market

Key Points:

• Legal & General, managing $1.5 trillion in assets, plans to enter the blockchain tokenization space, following industry giants.
• The tokenization of traditional assets has gained traction, especially after BlackRock launched its BUIDL fund on Ethereum.

The London-based Legal & General (L&G Ventures), one of the UK’s most significant pension and investment managers, will plunge into the fast-growing blockchain-based tokenization space.

Legal & General Explores Blockchain Tokenization Opportunities

With a management portfolio of about $1.5 trillion in assets under management, L&G Ventures is about to tap into this novel frontier of finance that has recently gained momentum among key financial players.

Tokenization refers to the process by which traditional assets—money-market funds backed, for example, by U.S. Treasuries—are digitized into tokens on a blockchain. A recent trend has taken the fancy of financial giants. The latest was BlackRock, the world’s largest asset manager, joining others to launch its BUIDL fund on the Ethereum blockchain. Other biggies like Franklin Templeton, State Street, and Abrdn followed suit, further endorsing the tokenization idea.

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L&G Aims to Enhance Fund Efficiency and Accessibility

The global head of trading at LGIM, Ed Wicks, indicated the firm’s direction when he said: “We are considering how to make the Legal & General Investment Management Liquidity funds available in tokenized format.” He indicated that digitising the funds industry would drive efficiency, reduce cost, and extend the availability of investment solutions to an increasingly wide range of investors.

L&G Ventures is not new to blockchain engagement; it has been researching its importance since 2019. Back then, L&G announced it would be using AWS’s managed blockchain system to manage and record bulk annuities for its insurance operations. This is a firm indication of how L&G Ventures is committed to innovation and perhaps also recognizes the transformative influence of blockchain in the financial world. L&G is positioning itself as a key player as this tokenisation trend continues to evolve.