Legal & General (L&G), a London-based company overseeing $1.5 trillion in retirement and investment, has entered the world of crypto tokenization. This move comes in the wake of similar initiatives by other major financial giants such as BlackRock and Franklin Templeton. Crypto tokenization involves representing traditional assets as tokens on a blockchain network.
L&G’s involvement in Crypto Tokenization
The adoption of crypto tokenization by traditional financial institutions is on the rise. This process allows traditional assets, like U.S. Treasury-backed money market funds, to be converted into tokens on the blockchain. Through this endeavor, L&G aims to solidify its position in the sector.
Actions taken by other prominent firms
BlackRock is leading the charge by unveiling the BUIDL fund on the Ethereum blockchain. Other major players like Franklin Templeton, State Street, and Abrdn have also introduced similar offerings. These developments indicate that crypto tokenization is gaining momentum within the financial industry.
Ed Wicks, L&G’s head of global trading, revealed that the company is exploring investment management liquidity funds in tokenized formats. Wicks believes that digitizing the funds industry will improve efficiency and reduce costs.
L&G has been involved in blockchain technology since 2019 when it announced plans to utilize a blockchain system managed by Amazon Web Services (AWS) for handling and recording bulk annual payments in its insurance business.
BlackRock launched the BUIDL fund on the Ethereum blockchain in March, primarily targeting investments in cash, debt securities, and U.S. Treasury bonds. BlackRock has partnered with Securitize to enhance the market utilization of the BUIDL token.
This collaboration enables the use of the BUIDL token on derivatives platforms like Binance, OKX, and Deribit. BlackRock aims to challenge the dominance of Circle and Tether in the stablecoin market.
Franklin Templeton has also invested in crypto tokenization, intensifying competition in the sector. These initiatives by major firms accelerate the integration of crypto assets into financial products.
Furthermore, State Street and Abrdn, among other large companies, are implementing their tokenization projects, bringing diversity to the market. The goal of these activities is to provide a wider range of investment solutions for clients.
The shift of traditional financial institutions towards crypto tokenization reflects a drive for digitization and innovation in investment strategies. This trend is expected to continue gaining momentum.
The widespread adoption of tokenization in the financial sector could lead to more flexible and accessible investment tools for clients. These developments may pave the way for the digitization of financial products in the future.
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Disclaimer: The information provided in this article should not be considered as investment advice. Investors should be aware of the high volatility and risks associated with cryptocurrencies and should conduct their own research.
