Legal & General Asset Management (L&G), one of the UK's largest asset managers with a £1.2 trillion portfolio, has made its liquidity funds available in tokenized form through the Calastone distribution network. The funds manage more than £50 billion in assets and are denominated in US dollars, euros and British pounds. They target capital preservation with same-day liquidity.
What Changed for Investors
Previously, L&G liquidity fund shares existed only through traditional settlement systems. Now those same funds have tokenized share classes. Authorized participants can transact through digital infrastructure, while traditional shares remain available through existing channels.
This parallel approach reduces transition risk. Organizations not yet ready for blockchain operations can keep working as before. Nothing breaks - a new option simply appears.
The technical backbone is Calastone, part of SS&C Technologies, which connects more than 4,500 financial institutions globally. The network handles token creation, order routing, trade aggregation, reconciliation and on-chain settlement, integrated with existing transfer agent and fund administration systems.
Why £50B Is a Big Number
The market for tokenized US Treasuries and money market funds has grown from $8.9 billion at the start of the year to $13 billion today, according to RWA.xyz. BlackRock BUIDL leads with $2.47 billion, followed by Franklin Templeton at $993 million and WisdomTree at $864 million.
L&G's £50 billion is four times larger than that entire market combined. Not all of it will shift to blockchain format immediately. But even 10% of L&G's funds flowing through the tokenized channel would add roughly $6 billion from a single player.
Ethereum as the Standard for Institutional Funds
Tokenized versions of L&G funds will initially be issued on Ethereum and other EVM-compatible networks. This choice follows a pattern. BlackRock BUIDL, Franklin Templeton and now L&G have all settled on EVM-compatible chains as their standard for institutional products. Ethereum provides smart contract liquidity, a mature custody ecosystem and a long audit history.
BlackRock expanded BUIDL to Solana in March. Franklin Templeton connected the Canton Network in November. L&G now adds another major data point to the map of Ethereum-based institutional funds.
BIS Flags a Structural Risk
The Bank for International Settlements has flagged a structural challenge with tokenized funds. Token transfers can happen instantly, but the underlying assets still settle on traditional timelines - creating a gap. In calm markets this gap is invisible. During a crisis it can trigger liquidity risks and contagion across funds.
The industry does not yet have a clear solution to this problem. L&G and Calastone did not address how they handle it specifically.
The UK Regulatory Picture
L&G is moving at the same time the UK's Financial Conduct Authority is consulting on rules for crypto assets, covering custody, trading and settlement. A full regulatory framework is planned for 2027. For large British asset managers, that gives a window to build positions before rules are locked in and competitors catch up.
L&G is not the first to tokenize fund shares, but its £1.2 trillion in total assets sets a new scale for the Calastone network. The fact that the move uses public EVM networks rather than a private blockchain says something about where institutional tokenization is heading. Those tracking the market and considering buying Ethereum with hryvnia can compare current rates from verified exchangers on Kurslog.
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