Demand for real-world assets (RWAs) is growing rapidly, so tokenization specialist Securitize has launched a tokenized credit fund with $57 trillion financial services giant BNY.
The securitized 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.
According to the release, Grove, the onchain credit-focused capital allocator of DeFi protocol Sky (SKY), plans to put $100 million into the fund as an anchor investor.
The offering aims to bring one of the most stable credit products on the blockchain rails as demand for tokenized assets accelerates. BCG and Ripple estimated that the tokenized real-world assets (RWA) market could reach $18.9 trillion by 2033, up from $35 billion currently.
CLOs break down corporate loans into tranches of different risk levels. AAA-rated tranches offer the safest, floating-rate exposure that typically attracts institutional investors.
Historically, these investments have been difficult to access or slow to settle. Tokenizing fund shares can change this by enabling faster settlements, better distributions and easier fractional ownership.
“For clients looking for yield, tokenization is a great way to improve access to high-quality credit in an efficient and transparent instrument,” said Jose Minaya, global head of BNY Investments and Wealth.
Securities have 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 valuation of $1.25 billion, aiming to become the first US-listed end-to-end tokenization firm.
Read More: Tokenization firm Securities aims for public listing via SPAC deal at $1.25B valuation