BNY Mellon and Securitize Launch Onchain Tokenized Fund Backed by AAA-Rated CLOs

Securitize, a leader in digital asset securities, has partnered with banking giant BNY Mellon to launch a tokenized fund backed by AAA-rated collateralized loan obligations (CLOs). This initiative moves a traditionally complex and exclusive financial instrument onto the blockchain, enhancing accessibility and transparency while serving as a potential blueprint for the tokenization of traditional finance (TradFi).

The fund is issued onchain and accessible through Securitize’s platform, with BNY Mellon acting as the custodian for the underlying assets, and a subsidiary of the bank managing the portfolio. Pending governance approval within the Sky Ecosystem, Grove, an institutional-grade credit protocol, plans to anchor the fund with a $100 million allocation. Global CLO issuance has topped $1.3 trillion, underscoring the significance of this move.

Tokenization streamlines ownership tracking, reduces settlement times, cuts administrative costs, and enables 24/7 market access and fractional investment—features not available in traditional markets. Securitize CEO Carlos Domingo emphasized that this launch is "a major step in making high-quality credit more accessible, efficient, and transparent through digital infrastructure." This announcement follows Domingo’s recent comments revealing Securitize’s plans to go public via a merger with Cantor Equity Partners II, Inc.

The tokenization of real-world assets is accelerating, with over $35.5 billion now represented onchain, according to RWA.xyz. This development aligns with broader trends, such as Ondo Finance’s tokenized US Treasury Fund on the XRP Ledger and Centrifuge’s partnerships to launch tokenized funds on Avalanche, highlighting the growing integration of blockchain with legacy financial systems.