BNY Mellon has teamed up with tokenization specialist Securitize to launch a new fund that brings AAA-rated collateralised loan obligations (CLOs) on-chain — a landmark move in the evolution of real-world assets into blockchain infrastructure.
The newly launched fund—a collaboration between BNY Mellon and Securitize—aims to provide institutional investors with on-chain exposure to highly rated CLO tranches. Under this arrangement, BNY Mellon will serve as custodian of the underlying assets while its subsidiary manages the investment portfolio, ensuring institutional-grade compliance and oversight.
The fund is structured to operate on the Ethereum network, which enables tokenised access, faster settlement, and fractional ownership compared to traditional structures. One of the striking features announced is a potential anchor investment of around US$ 100 million from a prominent on-chain credit allocator, signalling substantial institutional interest in tokenised structured credit.
Structured credit enters the tokenized realm
CLOs are complex financial instruments that bundle corporate loans into tranches of varying risk profiles, often requiring robust infrastructure for loan servicing, cash-flow monitoring and trustee oversight. By tokenising these assets, the fund seeks to reduce friction in access and transferability, opening up possibilities for a broader set of investors and faster liquidity cycles. The move is especially significant because it shows a deliberate progression: many institutions began tokenisation with simpler instruments such as money-market funds; now they are targeting more sophisticated credit products.
From a strategic standpoint, the launch underscores confidence that real-world-asset tokenisation is moving beyond pilot phases. BNY’s involvement lends credibility and institutional visibility, while Securitize provides the digital-asset issuance and fund wrapper infrastructure. Together, they are positioning tokenised structured credit as a bridge between traditional finance and on-chain innovation.
However, the launch also raises important questions around risk management, transparency and regulation. Even though the tokenised fund targets AAA-rated tranches, tokenisation does not eliminate underlying credit risk, liquidity risk or operational complexity. The success of the initiative will depend on how efficiently the tokenised shares are distributed, how well secondary-market liquidity develops, and how regulators respond to this new vehicle.
