BNY Mellon & Securitize Tokenize $100M CLO Fund

Securitize, a leading real-world asset tokenization platform, has unveiled a groundbreaking tokenized fund designed to provide investors with direct access to AAA-rated collateralized loan obligations (CLOs) onchain. This initiative, developed in partnership with global investment bank BNY Mellon, marks one of the most significant entries of traditional financial institutions into the tokenization space. The collaboration represents a strategic fusion of BNY Mellon’s century-long expertise in asset custody and Securitize’s blockchain technology platform, creating a new paradigm for institutional investment in credit products.

The timing of this launch coincides with unprecedented growth in the CLO market, where global issuance has topped $1.3 trillion according to the announcement. By bringing AAA-rated floating-rate credit onchain, the partners are addressing a substantial market opportunity while providing institutional investors with enhanced accessibility and efficiency. The tokenization of such high-quality credit instruments demonstrates the maturation of blockchain technology in handling complex financial products that were previously the exclusive domain of traditional finance.

The partnership establishes a robust institutional framework for the tokenized CLO fund, with BNY Mellon serving as the custodian for the fund’s underlying assets while a subsidiary of the bank will manage the portfolio. This dual-role approach leverages BNY Mellon’s established reputation in asset safeguarding while ensuring professional management of the CLO investments. The involvement of such a prestigious financial institution provides crucial credibility and risk management oversight for investors venturing into tokenized assets.

Grove’s commitment of $100 million as an anchor investment signals strong institutional confidence in the tokenization model and represents a substantial vote of confidence in the partnership’s approach. This anchor investment not only provides initial capital but also serves as a benchmark for other institutional investors considering entry into tokenized real-world assets. The significant capital commitment underscores the growing institutional demand for blockchain-based investment vehicles that combine traditional finance’s credit quality with blockchain’s operational advantages.

This initiative represents a major advancement in the institutional adoption of tokenized real-world assets, combining traditional finance’s credit products with blockchain efficiency and accessibility. The tokenization of AAA-rated CLOs by a traditional financial institution of BNY Mellon’s stature marks a pivotal moment in the convergence of traditional finance and blockchain technology. It demonstrates that major financial institutions now view blockchain not as a threat but as an enabling technology for improving existing financial markets.

The partnership between Securitize and BNY Mellon creates a blueprint for how traditional financial institutions can leverage blockchain technology to enhance product offerings while maintaining the regulatory compliance and risk management standards expected by institutional investors. As the CLO market continues to expand beyond $1.3 trillion in global issuance, the ability to access these instruments through tokenized funds could unlock new liquidity and investor participation. This development suggests that tokenization is moving from experimental phase to mainstream financial infrastructure, with the potential to transform how institutional investors access and trade credit products in the coming years.