 plans to explore blockchain-based tokenization, aiming to enhance accessibility.The trend toward tokenization has gained momentum with the launch of BlackRock's BUIDL fund and interest from major firms like Franklin Templeton.){kind=link}
Legal & General (L&G), the London-based pension and investment management firm managing $1.5 trillion in assets, is set to explore opportunities in the burgeoning blockchain-based tokenization space.
This move comes as tokenization, which represents traditional assets like U.S. Treasuries-backed money market funds as tokens on a blockchain, gains traction among major finance firms. In the U.S.A., blockchain in pension management forms is already quite mainstream.
The Global Acceptance of Tokenization
With the launch of BlackRock’s BUIDL fund on the Ethereum blockchain which is the largest asset manager in the world, the trend towards tokenisation has escalated. Prominent entities such as State Street, Abrdn, and Franklin Templeton have also initiated their investigation of tokenised assets.
Ed Wicks, the global head of trading at Legal & General Investment Management (LGIM), revealed the firm’s intentions, stating, “We are evaluating ways to make the Legal & General Investment Management Liquidity funds available in tokenized format.” This suggests a strategic effort by L&G to leverage blockchain technology to enhance liquidity and accessibility for its investment products.
Even though this can be counted as a major step towards entering the blockchain market, L&G Ventures is not totally new here. The firm has been researching the technology since 2019 when it announced plans to utilize AWS’s managed blockchain system to manage and record bulk annuities for its insurance operations.
This continued dedication to innovation is a reflection of L&G’s understanding of the revolutionary potential of blockchain technology in the financial sector.
The Pension Market in the U.S.A
Pension funds are exploring Bitcoin and other cryptocurrency investments in the United States. This may expose millions of retirees to the volatility of essentially unregulated financial products. This list has, law enforcement officers to firefighters.
This change in investment approach, mentioned by the Washington Post this year, demonstrates the increasing interest in incorporating cryptocurrencies into conventional finance.
L&G’s entry into the tokenisation space is in line with more general financial industry trends, which are characterised by businesses looking to update their products and take advantage of blockchain technology.
As more companies realize the potential of tokenization, the asset management and investing environment will shift dramatically.