A major UK investment manager with more than £286 billion ($377 billion) in assets under management is testing a new approach to tokenizing funds. Baillie Gifford has launched a product called BAGEY, which uses the public Ethereum and Solana blockchains as part of the legal ownership register of a regulated UK fund. This moves tokenization beyond the simple distribution of funds via blockchain channels and into the heart of fund administration.
The central idea is “native broadcast”. Instead of wrapping a traditional fund in a blockchain shell while retaining the primary ownership ledger off-chain, BAGEY uses the blockchain itself as a legal ledger. BNY provides the tokenization and wallet infrastructure, while NatWest Trustee and Depositary Services acts as the custodian. This means that the fund administrator, custodian, transfer agent, and custodian all coordinate around a shared ledger, not a private database that later syncs to a token.
UK Regulatory Support
The UK’s Financial Conduct Authority (FCA) earlier this year published policy statement PS26/7 on fund tokenization. This gave Baillie Gifford a regulatory framework to work with. Ciondigital previously reported this policy change, which allows tokenized fund models and DLT-based unitholder registries within permitted fund structures. BAGEY is now putting this policy into practice with a real asset manager, fund structure and public chain implementation.
Previous experiments, including tests by Chainlink, Swift and UBS, have shown that traditional fund workflows can integrate with blockchain systems. BAGEY goes further by asking whether property registration itself can reside on public chains, not just whether a single workflow can be automated.
What remains to be proven
The launch answers a qualified yes to a key question: regulated funds can evolve into legal infrastructure on public chains. But the model has yet to prove that it can handle secondary transfers, around-the-clock settlement, or use as collateral outside of a controlled primary market.
For asset managers, the burden of proof is changing. A tokenized wrapper can be judged on access and distribution. A native fund case must be evaluated in terms of legal purpose, operational resilience, controls on eligible holders, transfer failures, portfolio loss, sanctions control and redemption schedule. These are practical back-office details that determine whether the token becomes truly useful beyond issuance and redemption.
The upcoming operational test
BAGEY shows that a large traditional asset manager is willing to put a regulated fund on the public chain rails and label it native rather than wrapped. It also brings large service providers such as BNY and NatWest into the structure. But regulated funds don’t become legal infrastructure just through a smart contract. They need oversight, reconciliation, controls, custody procedures, and investor protections that institutions can defend.
The launch does not show that tokenized fund units will trade freely 24 hours a day, become widely accepted as collateral, or replace the rest of the fund administration stack. These results require evidence of actual transfer mechanisms, secondary liquidity, investor onboarding and legal treatment under stress.
For the moment, BAGEY is moving the discussion forward without ending it. This is a live test of whether public blockchains can contain a regulated record of ownership, rather than proof that they have already replaced the old funds administration stack. If the answer is yes, tokenization stops being primarily about packaging and becomes a change in the plumbing behind fund ownership.
