Securitize Rolls Out Tokenized Credit Fund with BNY on Ethereum

Tokenization specialist Securitize rolled out a tokenized credit fund with $57 trillion financial services giant BNY as appetite for real-world assets (RWA) is quickly growing.

The Securitize Tokenized AAA CLO Fund (STAC), available on the Ethereum network, aims to offer onchain investors exposure to collateralized loan obligations (CLOs), according to a press release on Wednesday.

BNY will act as custodian of the fund’s assets, while investment management will be handled by Insight, a BNY subsidiary focused on fixed income and structured credit strategies.

Grove, the onchain credit-focused capital allocator of DeFi protocol Sky (SKY), plans to place $100 million into the fund as an anchor investor, according to the release.

The offering aims to bring one of the most stable credit product onto blockchain rails as demand for tokenized assets accelerate. BCG and Ripple projected that the tokenized real-world asset (RWA) market could reach $18.9 trillion by 2033, up from $35 billion currently.

CLOs bundle corporate loans into tranches of varying risk levels. AAA-rated tranches, the most secure, offer floating-rate exposure that typically appeals to institutional investors.

Historically, these investments have been difficult to access or slow to settle. Tokenizing the fund’s shares could change that by enabling faster settlement, improved distribution and easier fractional ownership.

“For clients who are searching for yield, tokenization is a great way to improve access to high-quality credit in an efficient and transparent instrument,” said Jose Minaya, the global head of BNY Investments and Wealth.

Securitize has issued $4.5 billion of tokenized assets such as equities and funds, including BlackRock’s tokenized money market fund BUIDL.

The company filed plans this week to go public by merging with a Cantor Fitzgerald SPAC at a $1.25 billion valuation, aiming to become the first U.S. listed end-to-end tokenization firm.

Read more: Tokenization Firm Securitize Aims for Public Listing Via SPAC Deal at $1.25B Valuation