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Legal & General (L&G), a London-based company managing $1.5 trillion in retirement and investment, has stepped into the realm of crypto tokenization. This move follows similar initiatives by other major financial giants like BlackRock and Franklin Templeton. Crypto tokenization involves representing traditional assets as tokens on a blockchain network.
L&G’s Role in Crypto Tokenization
There is a growing trend of traditional financial firms adopting crypto tokenization. This process enables traditional assets, such as U.S. Treasury-backed money market funds, to be presented as tokens on the blockchain. Through this initiative, L&G aims to solidify its position in the sector.
Actions by Other Major Firms
BlackRock is leading the way by launching the BUIDL fund on the Ethereum 
$2,534 blockchain. Other major firms 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, indicated that the company is assessing investment management liquidity funds in tokenized formats. Wicks expressed that the digitization of the funds industry will enhance 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
Since 2019, L&G has been working with blockchain technology. At that time, it announced plans to use a blockchain system managed by Amazon Web Services (AWS) to handle and record bulk annual payments in its insurance business.
BlackRock launched the BUIDL fund on the Ethereum blockchain in March, aimed primarily at investing 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 allows for 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. The initiatives by these firms accelerate the integration of crypto assets into financial products.
Additionally, other large companies like State Street and Abrdn are implementing their own tokenization projects, adding diversity to the market. This activity aims to provide broader investment solutions for clients.
The shift of traditional financial institutions toward crypto tokenization reflects a pursuit of digitization and innovation in investment strategies. Continued momentum in this trend is anticipated.
The widespread adoption of tokenization in the financial sector may lead to more flexible and accessible investment tools for clients. These developments could pave the way for the digitization of financial products in the future.
