Legal & General (L&G), a prominent London-based financial institution with assets totaling $1.5 trillion, is exploring the possibility of delving into the realm of blockchain technology. This move would see L&G potentially joining the ranks of other major traditional players like BlackRock, Franklin Templeton, and Abrdn in offering blockchain-based money market funds. This innovative approach involves tokenization, a process whereby traditional assets, such as US Treasury-backed money market funds, are represented through tokens on the blockchain. This trend has gained traction among established financial firms in recent times.
Ed Wicks, the global head of trading at Legal & General Investment Management (LGIM), revealed that the company is actively exploring avenues to make their Legal & General Investment Management Liquidity funds available in a tokenized format. Wicks emphasized that digitizing the fund industry is crucial for enhancing efficiency, cutting costs, and expanding the range of investment opportunities accessible to a broader spectrum of investors.
The genesis of L&G’s interest in blockchain technology dates back to 2019 when the company announced its intention to leverage Amazon Web Services’ (AWS) managed blockchain system for managing and documenting bulk annuities within its insurance division. This strategic move underscores L&G’s commitment to harnessing cutting-edge technology to streamline operations and drive innovation within the financial sector.
By embracing blockchain technology and exploring tokenization possibilities, Legal & General is poised to revolutionize the financial landscape, offering novel investment solutions and paving the way for enhanced accessibility and efficiency in the fund industry.
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