Tokenized Funds

A tokenized fund issues one token per unit of the fund, and each token's value tracks the fund's net asset value the same way a conventional fund share does. The fund itself still holds real assets, most often short-term government debt or other low-risk instruments for the money market funds that lead the category, and a licensed fund administrator or transfer agent still keeps the legal record of who owns what. The blockchain layer adds a parallel, machine-readable record that updates as tokens change hands, which is what lets the token move and settle faster than the underlying fund's normal subscription and redemption cycle. Some tokenized money market funds accrue yield daily through a rebase mechanism, so a holder's token balance grows on its own each day.

BlackRock launched its USD Institutional Digital Liquidity Fund, known as BUIDL, in March 2024 with Securitize as transfer agent. BUIDL invests in cash, US Treasury bills and repurchase agreements, targets a stable one-dollar token value, and held roughly 2.5 billion US dollars in assets under management across six blockchains as of May 2026, making it one of the two largest tokenized Treasury products alongside Circle's USYC. In May 2026, BlackRock filed with the US Securities and Exchange Commission for two further tokenized funds. Franklin Templeton runs a comparable fund and extended the model into a Luxembourg UCITS structure aimed at European allocators, alongside earlier entrants such as Ondo Finance and Matrixport. Asset managers including KKR, Hamilton Lane, Brevan Howard and JPMorgan have each launched their own tokenized product lines.

An ETF trades on a stock exchange during market hours and settles through the standard securities settlement cycle. A tokenized fund can settle continuously, since a blockchain does not close for the weekend, and a token can move directly between two holders without going through a broker. A tokenized fund does not automatically get an ETF's stock-exchange listing or its market-maker liquidity. Most tokenized funds today sell only to institutional and accredited investors through the issuer's own platform, so a retail investor cannot simply buy a share through a normal brokerage account the way they would buy an ETF.

A tokenized fund share is a security under EU and US law, not a crypto-asset under MiCA, so it stays subject to the same fund regulation, prospectus rules and investor protections as any other fund of its kind. In Germany, the eWpG lets a fund's units exist as electronic securities, including as tokens on a blockchain, without changing the fund law that governs the fund itself. Custody is the open point regulators watch most closely: a tokenized fund still needs a licensed custodian for the underlying assets, and MiCA-style custody rules do not automatically apply to a fund token the way they apply to a crypto-asset. Regulators in the US and the EU have so far reviewed each tokenized fund launch under their existing securities rulebook, without a separate category of rules for the token wrapper itself. The European Fund and Asset Management Association (EFAMA), whose tokenization task force Union Investment's Christoph Hock chairs, asks for more in its guide Tokenisation, a buy-side practitioner's guide: higher thresholds under the DLT Pilot Regime, and MiFID, AIFMD, EMIR and CSDR adjusted to the pilot regime and MiCA, so that one rulebook covers traditional and tokenized funds.

Tokenized funds and fund infrastructure were on the program of a Point Zero Forum side event in Zurich, where 21X, Franklin Templeton, DFNS, AMINA and Chainlink spoke on tokenized asset infrastructure, and of the Forum für Digitale Vermögenswerte, a Finance Loop partner event. At Capital & Code in Frankfurt, two panels deal with funds: Franklin Templeton, KfW and Union Investment on tokenized money market funds, and Standard Chartered Luxembourg, the Solana Foundation, Allfunds Blockchain and Utila on fund distribution over institutional blockchain rails. Tokenized funds sit in Finance Loop's Investment & Digital Assets track. Related pages: tokenized bonds, RWA tokenization and tokenization in Germany.

A tokenized fund is a fund whose units are represented as tokens on a blockchain, alongside the fund's conventional legal record of ownership. The token's value tracks the fund's net asset value, and the fund still invests in real assets under standard fund regulation.

BUIDL held about 2.5 billion US dollars in assets under management across six blockchains as of May 2026, making it one of the two largest tokenized US Treasury products, alongside Circle's USYC.

No. A tokenized fund share is a security, regulated under existing fund and securities law, not a crypto-asset under MiCA. MiCA explicitly excludes financial instruments already covered by EU securities regulation.