Legal & General Eyes Blockchain-Based Tokenization in $1.5 Trillion Move

Legal & General (L&G), the London-based pension and investment management powerhouse overseeing $1.5 trillion in assets, is preparing to make a significant entrance into the blockchain-based tokenization space, a rapidly growing area of interest among financial giants. As the firm explores ways to innovate and improve efficiencies in the investment sector, this move signals a broader shift in how traditional finance is embracing blockchain technology to revolutionize asset management.

Tokenization, which involves representing conventional assets such as U.S. Treasuries-backed money market funds via blockchain tokens, has been gaining traction across the finance industry. This trend gained significant momentum following BlackRock’s foray into the space with its BUIDL fund on the Ethereum blockchain. Other financial giants like Franklin Templeton, State Street, and Abrdn have also launched tokenized products, recognizing the efficiency, transparency, and accessibility that blockchain can provide.

Ed Wicks, the global head of trading at Legal & General Investment Management (LGIM), L&G’s asset management arm, highlighted the firm’s interest in tokenization: “We are evaluating ways to make the Legal & General Investment Management Liquidity funds available in tokenized format. Digitization of the funds industry is key to improving efficiency, reducing costs, and making a broad range of investment solutions accessible to a wider range of investors. We look forward to continued progress in this space.”

Blockchain Networks and Industry Momentum

L&G’s entry into blockchain-based tokenization reflects the growing popularity of blockchain networks like Ethereum, Avalanche, Pecu Novus, and Solana, all of which are emerging as preferred platforms for financial institutions seeking to tokenize traditional assets. Tokenization offers several benefits, including real-time settlement, increased liquidity, and improved transparency. By using blockchain technology, asset managers can streamline processes, lower transaction costs, and expand access to institutional-grade investments to a broader audience.

L&G’s interest in blockchain dates back to 2019, when the firm announced plans to use Amazon Web Services’ (AWS) managed blockchain system to manage and record bulk annuities within its insurance business. This marked one of the company’s earliest explorations into blockchain, signaling a long-term commitment to digital innovation.

A Legacy of Leadership

Legal & General Investment Management (LGIM), the asset management arm of L&G, has established itself as one of Europe’s largest asset managers, with a strong reputation for managing long-term investment strategies. The firm is a leader in the UK market, managing pensions, insurance funds, and a wide range of other investment products for retail and institutional clients alike.

With its latest move toward tokenization, L&G is poised to be at the forefront of financial digitization. As the company evaluates ways to bring its liquidity funds to a blockchain-based format, it could provide a key pathway for traditional assets to be more easily traded and accessed globally.

Transforming Finance Through Blockchain

L&G’s entrance into the tokenization space comes at a time when the financial industry is undergoing a profound transformation, with blockchain technology offering new solutions for long-standing inefficiencies. The tokenization of assets has the potential to democratize access to investments, reduce counterparty risk, and offer unprecedented levels of transparency.

As the global financial landscape shifts toward more digital-first solutions, L&G’s embrace of tokenization signals a strong vote of confidence in blockchain’s future role in reshaping traditional asset management. The move aligns the firm with other forward-thinking giants like BlackRock, Franklin Templeton, and State Street, all of whom are exploring ways to leverage blockchain for the next generation of financial products.

For Legal & General, this may well be the beginning of a new era in asset management, where blockchain-based investments are no longer niche offerings but integral to the future of global finance.

Terry Jones
Digital Assets Desk