Baillie Gifford, an 118-year-old investment firm from the Scottish capital of Edinburgh, has brought a UK-regulated bond directly onto public blockchains. With $260 billion under management, Baillie Gifford has joined hands with global custody giant BNY to launch the Baillie Gifford Enhanced Yield Fund (BAGEY), a tokenized corporate bond natively on Solana and Ethereum. As a result, it stands as the first publicly available, fully native UK-regulated tokenized fund.
With the ticker $BAGEY, it offers a 7% yield for eligible investors in the U.K., Switzerland, and the Cayman Islands, subject to applicable laws, regulations, and distribution restrictions. This gives access to an actively managed, short-duration portfolio of public corporate bonds to the eligible investors.
In the partnership, BNY provides the tokenization and wallet infrastructure. Baillie Gifford Digital Assets unit announced the launch on X, terming it “an actively managed bond fund, issued natively on-chain, with the blockchain as the legal source of truth.” The fund size has not been disclosed publicly yet.
The fund is operated through a U.K.-regulated Open-Ended Investment Company (OEIC), a form of collective investment fund structured as a limited liability company that distributes capital from multiple investors across equities or bonds.
It’s Not a Wrapper, It’s Native
Most tokenized funds operate through a wrapper structure, i.e., as digital mirrors of existing products; investors hold a tokenized receipt representing a claim on funds whose ownership remains off-chain in a traditional registrar. This makes the blockchain a secondary record rather than the official one.
BAGEY works differently in this aspect. The token itself is the legal holding. Ownership lives on Solana and Ethereum; subscriptions and redemptions are settled in USDC directly against the chain. The blockchain serves as the register of record, not a representation of one.
Solana’s official account confirmed the design: “Not a wrapper. The blockchain is the register of record.”
Theo Golden, Head of Digital Assets and Tokenisation at Baillie Gifford, framed the distinction sharply. “It is a fund issued on-chain, with the blockchain serving as the register of record,” he said. Investors hold the fund directly, with direct ownership and direct recourse.
BNY’s Role in the Infrastructure
BNY (The Bank of New York Mellon Corporation) is the world’s largest custodian of assets under custody, with approximately $59.4 trillion under custody/administration, in addition to managing $2.1 trillion in client assets. The bank handles the Solana and Ethereum wallet infrastructure, tokenization mechanics, and regulatory integration with the UK’s Financial Conduct Authority-regulated fund system.
The bank co-designed the fund alongside Baillie Gifford as part of a long-running strategic partnership. While the bank provides the tokenization and wallet infrastructure that enable direct issuance and redemption, NatWest Trustee and Depositary Services Limited performs the Depositary role for the fund.
Katey Neate, BNY’s Global Head of Investor Solutions, said the model proves regulated structures can evolve on-chain. “Tokenisation has moved from concept to real-world application,” she said. BNY has framed the partnership as a global blueprint for issuing and servicing traditional assets on blockchain rails. This direct issuance model also reduces operational complexity, as no secondary legacy register is needed.
What Does It Mean for Tokenized Finance
In May 2026, the overall real-world asset market crossed the mark of $32 billion. Tokenized Treasuries by themselves reached approximately $14.79 billion by the halfway point of June. In this scenario, an actively managed credit product being issued natively under UK law exponentially raises the technical bar to new heights. This is also testimony to the fact that mainstream fund managers can adopt public blockchains without having to move away from regulated frameworks.
Partner at Baillie Gifford, Stuart Dunbar, termed the move as a long-term commitment. He described tokenization as an integral evolution rather than just a short-term trend. Moreover, he stressed the point that the firm pursued the launch with clients in mind, not commercial speed. The decision to deploy simultaneously on both Ethereum and Solana also showcases confidence in multi-chain liquidity for institutional products.
When it comes to investors and builders, the takeaway is quite concrete. The native issuance boosts the blockchain from being just a representation layer to being a recordkeeping layer now. This, in turn, leads to the fund mechanics, settlement, and ownership records all converging on a single ledger. This convergence is what makes tokenized finance tick more than just being a marketing exercise that may lose steam in due time.
Also Read: Why Baillie Gifford Rejected Token “Wrappers” for Its 7% Native Onchain Bond Fund