Connecting DeFi with Traditional Finance: BNY and Securitize Introduce a Tokenized Credit Fund

The Bank of New York Mellon (BNY) has teamed up with tokenization expert Securitize to introduce the Securitize Tokenized AAA CLO Fund (STAC), an innovative financial offering that brings AAA-rated collateralized loan obligations (CLOs) onto the

blockchain. By combining BNY’s custodial strengths with Securitize’s digital asset technology, this fund represents a major advancement in the tokenization of traditional financial (TradFi) assets, providing institutional investors with greater liquidity and transparency, according to .

BNY Investments, which oversees $2.1 trillion in assets, acts as sub-advisor for the fund and will safeguard the underlying assets using BNY’s digital asset services. Grove, a credit infrastructure protocol within the decentralized Sky ecosystem, is expected to make a $100 million anchor investment, pending governance approval, as reported by

. Grove, which manages tokenized credit for Sky’s $9 billion stablecoin USDS, intends to leverage the fund to connect decentralized finance (DeFi) with TradFi, enabling quicker settlements and fractional access to premium credit assets, according to .

Collateralized loan obligations, which group together corporate loans into tranches with varying risk levels, have been a mainstay in institutional investment portfolios. The highest-rated AAA tranches, known for their safety and liquidity, now benefit from blockchain-enabled tokenization. By issuing fund shares as tokens on Ethereum, STAC overcomes traditional challenges such as delayed settlements and restricted access, as reported by

. Jose Minaya, who leads BNY Investments and Wealth globally, highlighted that tokenization "broadens access to top-tier credit through a transparent and efficient vehicle," according to a .

Industry forecasts highlight the importance of this development. Boston Consulting Group and Ripple predict that the tokenized real-world asset (RWA) market could expand from $35 billion today to $18.9 trillion by 2033, as noted in a

. With global CLO issuance surpassing $1.3 trillion in 2024, these instruments are seen as ideal candidates for tokenization, offering institutional investors resilient, floating-rate exposure, according to Ledger Insights. Securitize CEO Carlos Domingo stated that the fund "signals the dawn of a new chapter in TradFi tokenization," merging BNY’s infrastructure with the programmable nature of blockchain, as mentioned in the BNY Mellon press release.

This collaboration also underscores BNY’s strategic shift toward blockchain technology. After previously supporting tokenized money-market funds such as BlackRock’s BUIDL, the bank is now moving into structured credit. If Grove’s $100 million commitment is approved, it would further demonstrate the potential of tokenized credit markets, CoinDesk reported. Meanwhile, Securitize, which has already tokenized $4.5 billion in assets, is working toward a $1.25 billion SPAC merger that would make it the first U.S.-listed company focused on tokenization, according to Bitget.