A 117-year-old investment firm just put a regulated bond fund on a public blockchain, and it may be the most significant step yet in bringing traditional finance onchain. Baillie Gifford, the
A 117-year-old investment firm just put a regulated bond fund on a public blockchain, and it may be the most significant step yet in bringing traditional finance onchain.
Baillie Gifford, the Edinburgh-based independent asset manager founded in 1908, has launched the Baillie Gifford Enhanced Yield Fund (BAGEY) in partnership with BNY, making it the first publicly available, fully native tokenised fund regulated in the United Kingdom.
The fund runs on both Ethereum and Solana.
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Most tokenised funds work by wrapping an existing product in a digital layer, the underlying fund stays the same, and a token is placed on top of it. BAGEY does not work that way.
Here, the token itself is the fund holding. Investors own the fund directly through tokens issued on a public blockchain, which also serves as the legal record of ownership.
There is no legacy infrastructure underneath, the blockchain is the infrastructure.
"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," said Theo Golden, Head of Digital Assets and Tokenisation at Baillie Gifford. "Investors hold the fund directly: direct ownership, direct recourse."
BAGEY is a short-duration fixed income fund, in plain terms, it invests in corporate bonds with relatively short maturities, which tend to carry less risk than longer-dated debt.
The fund is denominated in U.S. dollars and currently offers a yield of around 7%, with a two-year duration and an average credit quality of BBB.
It is daily-dealt, meaning investors can buy and redeem every day, and will be available to eligible professional investors in the UK, Switzerland, and the Cayman Islands.
The minimum investment is $100, and investors can fund positions using either stablecoins, initially USDC, issued by Circle, or traditional fiat currency.
Baillie Gifford brings more than 25 years of experience managing dedicated bond strategies to the fund's portfolio construction.
BNY, one of the world's largest financial services companies, is providing the tokenisation and wallet infrastructure for the fund. NatWest Trustee and Depositary Services Limited will act as the fund's depositary.
"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," said Katey Neate, BNY Global Head of Investor Solutions.
"This will be a global blueprint for shaping how traditional financial assets can be issued, serviced and accessed through blockchain-enabled infrastructure."
The decision to build on two of the most widely used public blockchains is deliberate.
Solana is one of the fastest and most widely adopted blockchains in the world, capable of processing thousands of transactions per second at minimal cost, making it increasingly the network of choice for institutional financial applications.
Ethereum, meanwhile, brings the deepest ecosystem of tokenised assets and onchain financial infrastructure.
Running across both increases interoperability, the ability of the fund to plug into a wider range of financial infrastructure as the market develops.
For Baillie Gifford, this is not a one-off experiment. Stuart Dunbar, a Partner at the firm, framed the launch as part of a longer-term view on how financial products will be built and distributed.
"Tokenisation is not a short-term theme for us, but an integral evolution in how financial products may be built, distributed and used over time," Dunbar said.
"The ambition is not tokenisation for its own sake. It is to build fund infrastructure that is recognisably institutional, but better suited to the way markets are evolving in the digital age."
The fund sets a notable precedent, a fully regulated, institutionally managed product using public blockchains not as an add-on, but as its core architecture.
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