Tokenized Credit Fund: BNY Mellon Expands into CLOs

BNY Mellon is advancing its blockchain-based asset tokenization strategy by launching the Securitize Tokenized AAA CLO Fund, which will offer institutional investors access to AAA-rated floating-rate collateralized loan obligations (CLOs) on the Ethereum network. BNY Mellon will act as custodian, with its subsidiary Insight Investment managing the portfolio. This move follows a deliberate sequence, having previously partnered with Goldman Sachs to tokenize money market funds, signaling a progression from simpler to more complex financial instruments. CLOs are significantly more complex than money market funds due to their bundled corporate loans and intricate risk tranches, requiring sophisticated monitoring. BNY Mellon's approach emphasizes controlled expansion, maintaining traditional recordkeeping alongside tokenized assets and utilizing permissioned networks to ensure regulatory compliance and institutional security standards. This launch positions BNY Mellon in competition with other major institutions like Goldman Sachs and Citigroup in the rapidly growing tokenized credit market, which is projected to reach nearly $19 trillion by 2033.

(Source：BeInCrypto)