Blab Crypto
Baillie Gifford Launches First UK-Regulated Tokenized Bond Fund on Ethereum and Solana
Baillie Gifford, the Edinburgh‑based investment manager founded in 1908, announced the launch of the Baillie Gifford Enhanced Yield Fund (BAGEY) on 22 June 2026. The fund is a dollar‑denominated, short‑duration portfolio of public corporate bonds that is issued and settled on the public blockchains Ethereum and Solana. The product is the first fully native UK‑regulated tokenized fund, and it is available only to eligible investors in the United Kingdom, Switzerland and the Cayman Islands.
The fund is structured as a U.K.‑regulated Open‑Ended Investment Company (OEIC). Under the OEIC framework, the fund pools capital from investors and invests in a range of assets, in this case short‑duration corporate bonds. The OEIC is managed by Baillie Gifford and is subject to the same regulatory oversight that applies to traditional bond funds, including eligibility checks, anti‑money‑laundering controls and reporting requirements.
Tokenisation is handled by the Bank of New York Mellon (BNY). BNY provides the wallet infrastructure that allows investors to hold the fund’s tokens directly on the blockchain. NatWest Trustee and Depositary Services acts as the depositary, ensuring that the underlying bond holdings are held in custody and that investor records are maintained in accordance with regulatory standards.
Baillie Gifford emphasises that the blockchain is not merely a wrapper around a legacy fund. According to the firm, the fund is issued on‑chain, with the blockchain serving as the register of record. Investors therefore hold the fund directly and have direct recourse to the underlying assets. Theo Golden, head of digital assets and tokenisation at Baillie Gifford, said the product was designed differently: “The Baillie Gifford Enhanced Yield Fund is not a token placed on top of a fund. It is a fund issued onchain, with the blockchain serving as the register of record. Investors hold the fund directly: direct ownership, direct recourse.”
The fund’s yield is reported at around 7 percent, a figure that reflects the short‑duration nature of the underlying corporate bond holdings. Because the fund is dollar‑denominated, it is settled in USDC on the blockchains, which aligns the settlement currency with the fund’s investment currency.
Distribution is restricted to eligible investors only. The fund is available to investors who meet the eligibility criteria set by Baillie Gifford and who reside in the United Kingdom, Switzerland or the Cayman Islands. The restrictions are designed to comply with the regulatory frameworks that govern the OEIC and to ensure that the fund remains within the scope of the FCA’s oversight.
The choice of public blockchains is significant. Earlier tokenisation projects have often relied on private or permissioned networks, which can limit interoperability. By using Ethereum and Solana, Baillie Gifford and BNY are positioning the fund for greater compatibility with other on‑chain services and for potential secondary market activity. However, the use of public chains also requires robust controls around wallet security, transfer restrictions and auditability.
The launch is part of a broader trend in which traditional asset managers are testing tokenisation beyond cash‑like products. Fixed‑income products are a natural fit because they already rely on settlement, custody, transfer agency records and investor eligibility controls. Moving these processes onto the blockchain could reduce friction if the legal and operational design is built around the fund itself rather than a token wrapper.
Katey Neate, global head of investor solutions at BNY, said the launch reflects a shift from theory to deployment: “Tokenisation has moved from concept to real‑world application, and this launch shows how regulated fund structures can evolve to meet the needs of a more digital, connected marketplace.”
While the fund’s immediate impact is likely to be measured rather than disruptive, the launch adds to evidence that tokenisation is becoming part of regulated market infrastructure. The combination of an established investment manager, a global custodian, public blockchains and a regulated fund structure suggests that the product is part of the institutional tokenisation trend rather than a standalone crypto experiment.
The fund’s success will depend on how well the on‑chain issuance handles investor onboarding, jurisdictional limits, anti‑money‑laundering controls, wallet recovery, transfer restrictions and auditability. If the controls prove robust, the model could offer cleaner records, faster transfer mechanics and more flexible distribution for fixed‑income markets.
In summary, Baillie Gifford’s BAGEY is the first fully native UK‑regulated tokenised bond fund, issued on Ethereum and Solana, backed by BNY’s tokenisation and wallet infrastructure, and governed by a U.K. OEIC framework. The product is available only to eligible investors in the U.K., Switzerland and the Cayman Islands, and it aims to provide direct ownership and direct recourse to a short‑duration corporate bond portfolio with a reported yield of around 7 percent.
The fund is structured as a U.K.‑regulated Open‑Ended Investment Company (OEIC). Under the OEIC framework, the fund pools capital from investors and invests in a range of assets, in this case short‑duration corporate bonds. The OEIC is managed by Baillie Gifford and is subject to the same regulatory oversight that applies to traditional bond funds, including eligibility checks, anti‑money‑laundering controls and reporting requirements.
Tokenisation is handled by the Bank of New York Mellon (BNY). BNY provides the wallet infrastructure that allows investors to hold the fund’s tokens directly on the blockchain. NatWest Trustee and Depositary Services acts as the depositary, ensuring that the underlying bond holdings are held in custody and that investor records are maintained in accordance with regulatory standards.
Baillie Gifford emphasises that the blockchain is not merely a wrapper around a legacy fund. According to the firm, the fund is issued on‑chain, with the blockchain serving as the register of record. Investors therefore hold the fund directly and have direct recourse to the underlying assets. Theo Golden, head of digital assets and tokenisation at Baillie Gifford, said the product was designed differently: “The Baillie Gifford Enhanced Yield Fund is not a token placed on top of a fund. It is a fund issued onchain, with the blockchain serving as the register of record. Investors hold the fund directly: direct ownership, direct recourse.”
The fund’s yield is reported at around 7 percent, a figure that reflects the short‑duration nature of the underlying corporate bond holdings. Because the fund is dollar‑denominated, it is settled in USDC on the blockchains, which aligns the settlement currency with the fund’s investment currency.
Distribution is restricted to eligible investors only. The fund is available to investors who meet the eligibility criteria set by Baillie Gifford and who reside in the United Kingdom, Switzerland or the Cayman Islands. The restrictions are designed to comply with the regulatory frameworks that govern the OEIC and to ensure that the fund remains within the scope of the FCA’s oversight.
The choice of public blockchains is significant. Earlier tokenisation projects have often relied on private or permissioned networks, which can limit interoperability. By using Ethereum and Solana, Baillie Gifford and BNY are positioning the fund for greater compatibility with other on‑chain services and for potential secondary market activity. However, the use of public chains also requires robust controls around wallet security, transfer restrictions and auditability.
The launch is part of a broader trend in which traditional asset managers are testing tokenisation beyond cash‑like products. Fixed‑income products are a natural fit because they already rely on settlement, custody, transfer agency records and investor eligibility controls. Moving these processes onto the blockchain could reduce friction if the legal and operational design is built around the fund itself rather than a token wrapper.
Katey Neate, global head of investor solutions at BNY, said the launch reflects a shift from theory to deployment: “Tokenisation has moved from concept to real‑world application, and this launch shows how regulated fund structures can evolve to meet the needs of a more digital, connected marketplace.”
While the fund’s immediate impact is likely to be measured rather than disruptive, the launch adds to evidence that tokenisation is becoming part of regulated market infrastructure. The combination of an established investment manager, a global custodian, public blockchains and a regulated fund structure suggests that the product is part of the institutional tokenisation trend rather than a standalone crypto experiment.
The fund’s success will depend on how well the on‑chain issuance handles investor onboarding, jurisdictional limits, anti‑money‑laundering controls, wallet recovery, transfer restrictions and auditability. If the controls prove robust, the model could offer cleaner records, faster transfer mechanics and more flexible distribution for fixed‑income markets.
In summary, Baillie Gifford’s BAGEY is the first fully native UK‑regulated tokenised bond fund, issued on Ethereum and Solana, backed by BNY’s tokenisation and wallet infrastructure, and governed by a U.K. OEIC framework. The product is available only to eligible investors in the U.K., Switzerland and the Cayman Islands, and it aims to provide direct ownership and direct recourse to a short‑duration corporate bond portfolio with a reported yield of around 7 percent.
