A landmark development in the UK’s financial sector has emerged with the introduction of the country’s first blockchain-based UCITS tokenized fund. The initiative has been launched in a pilot format under the oversight of the UK’s Financial Conduct Authority (FCA), marking a significant step toward integrating blockchain technology into mainstream asset management.
The fund, known as the UK UCITS-based Strategic Bond Feeder Fund, has been developed by Baillie Gifford, a prominent investment management firm. This pilot is the first instance in the UK where a tokenized version of a UCITS-structured fund has been deployed on a public blockchain. According to the firm’s investment management team, the move is expected to serve as a foundational step in modernizing fund infrastructure by leveraging blockchain’s capabilities for transparency, operational efficiency, and data integrity.
The launch has been led by Theo Golden, Investment Manager at Baillie Gifford, who conveyed that the adoption of blockchain for this initiative is more than a technological upgrade. He indicated that the project signals a shift in how asset management may evolve, with blockchain offering a new level of clarity and automation for investors and fund managers alike. Golden further explained that this pilot was made feasible through coordinated efforts with key industry participants, including UK financial authorities, the Investment Association, and digital securities exchange Archax.
The pilot-phase tokenized fund will remain accessible only to a select group of pre-approved clients. This controlled rollout is intended to serve as a technology validation process, allowing Baillie Gifford and its partners to gather data, assess real-world application, and evaluate performance in a regulated environment.
The project is underpinned by a structure compliant with UCITS (Undertakings for Collective Investment in Transferable Securities), a regulatory framework well known across Europe for its investor protection standards. By integrating this framework with blockchain technology, the initiative aims to demonstrate how digital infrastructure can enhance the accessibility, monitoring, and administration of traditional investment products.
Representatives from Baillie Gifford have emphasized that the tokenized fund could become a blueprint for future financial products. They believe the application of public blockchain not only increases transparency but also allows for automated compliance checks, faster settlement processes, and better auditability. This is expected to reduce operational overheads and improve investor confidence through real-time visibility into fund activity.
approved for launch by @TheFCA. Our work was referenced in the latest European Fund and Asset Management Association's paper 'Tokenisation: a Buysider Practitioner's Guide' and picked up Elizabeth Pfeuti in her latest piece. 2/ https://t.co/Z0EMUUS7zS
— Theo Golden, CFA (@TFGolden) June 20, 2025
As digital transformation continues to impact financial markets, the launch of this FCA-approved fund positions the UK as an early adopter of tokenized investment instruments within a regulated structure. While still in the pilot stage, the initiative has already drawn interest from various institutional players seeking to understand how blockchain can be responsibly integrated into traditional finance.
If proven successful, the Strategic Bond Feeder Fund may set a precedent for similar tokenized products in Europe and beyond, offering insights into how asset management can evolve in the era of decentralization and digital finance.
