Baillie Gifford launched a tokenized fixed-income fund with BNY, bringing a traditional actively managed bond strategy onto public blockchain rails through Ethereum and Solana. The Edinburgh-based investment firm, founded 118 years ago, unveiled the Baillie Gifford Enhanced Yield Fund, a dollar-denominated product that gives eligible investors access to a short-duration portfolio of public corporate bonds currently offering a yield of around 7%. The launch is part of a wider move by traditional asset managers to test tokenization beyond cash-like products and money market funds, with fixed income targeted because bond funds already depend on settlement, custody, transfer agency records, and investor eligibility controls that could see reduced friction if moved onchain.
Baillie Gifford Structures Fund as U.K.-Regulated OEIC
The fund is operated through a U.K.-regulated Open-Ended Investment Company, a collective investment structure that pools investor capital across assets such as equities or bonds. In this case, the portfolio is focused on short-duration public corporate bonds and is available only to eligible investors.
Distribution is limited to eligible investors in the U.K., Switzerland, and the Cayman Islands, subject to applicable laws, regulations, and distribution restrictions. That restricted access shows how tokenized funds are being developed inside existing securities and fund rules rather than as open retail crypto products.
BNY will provide tokenization and wallet infrastructure for the fund. NatWest Trustee and Depositary Services will act as depositary. The presence of established custody and depositary providers is important because tokenized real-world asset products still need traditional safeguards around fund assets, investor protection, and regulatory oversight.
The fund's use of Ethereum and Solana also points to a more public-chain approach than some earlier institutional tokenization projects, which often relied on private or permissioned networks. That choice may increase interoperability over time, but it also requires stronger controls around eligibility, wallets, transfers, and compliance.
Blockchain Serves as Register of Record for Fund Ownership
Baillie Gifford said the blockchain will serve as the register of record. In traditional funds, ownership records are usually maintained through transfer agents, custodians, nominees, and fund administrators. Tokenization can be limited if it only adds a blockchain token on top of that structure without changing the underlying recordkeeping process.
Theo Golden, head of digital assets and tokenization at Baillie Gifford, said the product was designed differently. "The Baillie Gifford Enhanced Yield Fund is not a token placed on top of a fund. It is a fund issued onchain, with the blockchain serving as the register of record. Investors hold the fund directly: direct ownership, direct recourse," Golden said.
That framing is important for institutional adoption. If investors directly hold the fund through onchain issuance, tokenization may become more relevant to settlement, ownership transfer, collateral use, and secondary market design. If the token is only a wrapper, the efficiency gains are likely to be narrower.
The model also raises operational questions. Onchain fund issuance must still handle investor onboarding, jurisdictional limits, anti-money laundering controls, wallet recovery, transfer restrictions, and auditability. The success of tokenized funds will depend on how well those controls work in live markets, not only on whether the product uses a public blockchain.
Tokenized Fixed-Income Fund Adds to Institutional RWA Trend
Real-world asset tokenization has become one of the main areas where traditional finance and blockchain infrastructure are overlapping. Asset managers, banks, custodians, and fintech providers are using tokenized structures to test whether funds, bonds, treasuries, private credit, and money market products can move more efficiently across digital rails.
The Baillie Gifford launch is notable because it brings together an established investment firm, a global custody provider, public blockchains, and a regulated U.K. fund structure. That combination makes the product part of the institutional tokenization trend rather than a standalone crypto experiment.
Katey Neate, global head of investor solutions at BNY, said the launch reflects a shift from theory to deployment. "Tokenisation has moved from concept to real-world application, and this launch shows how regulated fund structures can evolve to meet the needs of a more digital, connected marketplace," Neate said.
FAQ
What did Baillie Gifford launch with BNY?
Baillie Gifford launched the Baillie Gifford Enhanced Yield Fund with BNY, a tokenized fixed-income fund that operates on Ethereum and Solana. The dollar-denominated product gives eligible investors access to a short-duration portfolio of public corporate bonds and currently offers a yield of around 7%.
How is the Baillie Gifford Enhanced Yield Fund structured?
The fund is operated through a U.K.-regulated Open-Ended Investment Company and is available only to eligible investors in the U.K., Switzerland, and the Cayman Islands. BNY provides tokenization and wallet infrastructure, while NatWest Trustee and Depositary Services acts as depositary.
Why does Baillie Gifford say the blockchain serves as the register of record?
Baillie Gifford said the blockchain serves as the register of record because the fund is issued onchain, placing ownership and investor records directly on the blockchain layer. Theo Golden, head of digital assets and tokenization at Baillie Gifford, said investors hold the fund directly with direct ownership and direct recourse, rather than the token being placed on top of an existing fund structure.
