L&G Brings £50B Liquidity On-Chain via Calastone Tokenized Network

London-based Legal & General Asset Management has advanced its liquidity funds onto Calastone’s blockchain-powered distribution network, enabling investors to access and transfer fund shares via tokenized infrastructure within a regulated framework. LGAM’s tokenized share classes are issued with permissioned access, allowing authorized users to buy, hold and transfer them while traditional share classes remain available through conventional distribution channels.

The funds, denominated in US dollars, euros and British pounds, total more than £50 billion in assets under management and are designed for capital preservation with same-day liquidity. They invest in high-quality, short-term money market instruments, including government bonds, bank deposits and corporate debt.

Calastone’s network, which sits under SS&C Technologies, provides the end-to-end infrastructure for token creation, order routing, trade aggregation, reconciliation and on-chain settlement. It is integrated with existing transfer agents and fund administration systems, aiming to streamline custody and settlement workflows for tokenized fund shares. The tokenized versions of LGAM’s liquidity funds will initially be issued on Ethereum and other EVM-compatible networks.

LGAM administers roughly £1.2 trillion in assets across public and private markets, while Calastone connects more than 4,500 financial institutions globally, according to the parties involved. The development arrives as UK regulators work toward a broader crypto framework, with the Financial Conduct Authority conducting consultations on custody and trading rules ahead of a planned 2027 regulatory rollout.

Tokenized money market funds grow as asset managers expand distribution

Industry data from RWA.xyz shows tokenized US Treasury products, including money market funds, have climbed to more than $13 billion in total, up from about $8.9 billion at the start of the year. Leading the field is BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), with around $2.47 billion in assets, followed by Franklin Templeton’s OnChain US Government Money Fund at roughly $993 million and WisdomTree’s Government Money Market Digital Fund at about $864 million.

Asset managers have been broadening the reach of tokenized money market funds across additional blockchain networks and trading models. In November, Franklin Templeton integrated its Benji platform with the Canton Network to extend distribution of its tokenized money market fund to an institutional blockchain environment, while BlackRock expanded BUIDL to the Solana ecosystem in March. Earlier in the year, WisdomTree enabled 24/7 trading and instant settlement for its tokenized money market fund within a regulated framework.

As these products scale, the sector faces fresh risk considerations. The Bank for International Settlements has warned that mismatches between instant token transfers and slower underlying asset settlement could generate liquidity and contagion risks, underscoring the need for robust risk controls and interoperability across networks.

The trend toward tokenized money market funds reflects a broader push to digitize traditional financial products and improve liquidity and accessibility for institutions and sophisticated investors. Regulators are watching closely, balancing innovation with safeguards as the market tests new settlement and custody paradigms across multi-chain environments.

As the regulatory backdrop evolves, investors and fund managers will be watching three pivotal questions: will permissioned, tokenized distributions gain broader adoption across traditional fund brands; how quickly can on-chain settlement safely scale with real-world assets; and what standards will emerge to mitigate liquidity and settlement mismatches as activity grows across networks?

Readers should stay attentive to ongoing regulatory updates from the FCA and related bodies, as well as cross-network interoperability developments that will determine whether tokenized liquidity funds can become a standard feature of institutional portfolios.

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