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1. Baillie Gifford tokenized fund puts ownership on Ethereum
Edinburgh-based asset manager Baillie Gifford is running a regulated UK fund whose legal register of investors lives on Ethereum (ETH). The Baillie Gifford tokenized fund, the Enhanced Yield Fund (ticker BAGEY), treats on-chain tokens as the official record of who holds units, rather than as a copy of a ledger kept somewhere else.
The product has been described as the first fully native UK-regulated tokenized fund to keep its ownership registry on Ethereum. That description matters because it separates BAGEY from the many earlier experiments in which a blockchain token simply shadowed a conventional database. Here, the blockchain is the database that counts.
Baillie Gifford announced the fund on June 22, 2026. It also distributes units on Solana (SOL), but Ethereum serves as the register of record, and that design choice is what sets the product apart from most of the tokenized funds launched so far.
2. How most tokenized funds keep their books
To see why BAGEY stands out, it helps to look at how tokenized funds have usually been built. The common approach relies on two ledgers running side by side. A traditional transfer agent maintains the authoritative off-chain record of ownership, and a token on a blockchain acts as a digital twin of that entry.
In that model, the token is a convenience layer. It can make transfers faster or allow units to move between digital wallets, but if the token and the transfer agent's books ever disagree, the off-chain record prevails. The blockchain mirrors ownership; it does not define it.
This arrangement has been popular because it lets managers test blockchain distribution without rewiring the legal plumbing that underpins regulated funds. It also means the efficiency gains are limited, since two systems must be kept in sync and reconciled, and the old infrastructure never goes away.
3. What makes BAGEY different
BAGEY removes the second ledger altogether. The tokens themselves legally represent investors' interests in the fund, which means the state of the chain determines holdings. Put simply, if the on-chain record shows that a wallet holds units, those units belong to that holder in the eyes of the fund.
That is a meaningful step for regulated asset management. Ownership registers are among the most sensitive records a fund maintains: they determine who receives distributions, who can redeem, and who is entitled to the assets if something goes wrong. Moving that function onto a public blockchain shifts Ethereum from the role of settlement experiment toward that of official record-keeper for a supervised investment product.
The significance lies in Ethereum's function rather than in the price of ether. A regulated UK fund relying on the network as its legal source of truth is a test of whether public blockchain infrastructure can carry the same weight as the systems that custodians and transfer agents have operated for decades.
4. Why the unitholder register matters
A fund's register can sound like back-office detail, but it sits at the center of an investor's legal relationship with the product. Every subscription adds a name to the list, every redemption removes one, and every income payment is calculated from it. If the register is wrong, investors can be paid incorrectly or find their claims disputed.
Traditionally, keeping that list accurate has been the job of transfer agents and fund administrators, who process instructions, reconcile records and correct errors through manual and automated checks. Each handoff between intermediaries introduces delay and cost, and much of the work involves confirming that different copies of the same information still match.
A register maintained natively on a blockchain changes where that truth lives. Instead of several parties holding their own versions and reconciling them, there is one shared record that participants can inspect. For a daily-dealing fund such as BAGEY, that means each day's subscriptions and redemptions are reflected directly in the ledger that legally defines ownership.
That is the practical promise behind the FCA's decision to permit on-chain registers: fewer duplicated records, a clearer audit trail and a structure in which the token an investor holds is the investment itself, not a receipt pointing to it.
5. What does the Baillie Gifford Enhanced Yield Fund invest in?
The underlying strategy is deliberately familiar. The Enhanced Yield Fund holds a portfolio of bonds, and the novelty sits in the ownership structure rather than in the investments themselves. The fund targets a yield of approximately 7%.
Investors can deal in the fund daily, which matches the liquidity of many conventional bond funds. The minimum ticket for eligible investors is $100, a low threshold for an institutional-style product.
Access, however, is restricted. The fund is aimed at professional investors in the United Kingdom, Switzerland and the Cayman Islands. It is not a retail product, so the low minimum lowers the financial barrier for qualifying investors without opening the door to the general public.
6. The institutions supporting the structure
Baillie Gifford is not building the product alone. BNY provides the tokenization and wallet infrastructure, which covers creating the tokens that represent fund units and managing the accounts that hold them. Having one of the world's largest custody banks handle that layer gives the structure an institutional backbone that many crypto-native tokenization projects lack.
NatWest Trustee and Depositary Services acts as the fund's depositary. In UK fund structures, the depositary is an independent party responsible for overseeing how the fund is run and for safeguarding its assets. Its presence means the familiar checks of a regulated fund remain in place even though the register has moved on-chain.
The combination of a long-established asset manager, a global custody bank and a high-street banking group's depositary arm illustrates how tokenization in the UK is developing: inside the existing regulatory framework and alongside incumbent institutions, rather than as a parallel system outside it.
7. The FCA rule change behind the launch
The legal foundation for BAGEY is the Financial Conduct Authority's policy statement PS26/7, which the UK regulator published on April 30, 2026. The document sets out how distributed ledger technology can be used within authorized fund structures and specifically allows unitholder registers based on that technology inside open-ended investment companies.
An open-ended investment company, or OEIC, is a standard UK fund wrapper. It issues new shares when investors put money in and cancels them when investors take money out, so the size of the fund rises and falls with demand. The unitholder register is the list of who owns those shares at any given moment.
By confirming that this register could be kept on a blockchain, the FCA removed a key legal uncertainty that had kept most managers on the two-ledger model. Baillie Gifford moved quickly once that guidance was in place: its fund announcement followed the policy statement by less than two months.
The speed of the response suggests that at least some UK managers had been preparing for this change and were waiting for regulatory clarity rather than for the technology to mature. It also positions the UK as a jurisdiction where native on-chain fund registers are possible under existing fund rules.
8. Why a multi-chain setup matters
One notable feature of the fund is that it does not tie itself to a single blockchain. Units are distributed on Solana as well, while Ethereum carries the legal register of record.
That split points to a broader pattern. Rather than choosing one home chain and building everything around it, asset managers may increasingly treat public blockchains as interchangeable distribution infrastructure, picking networks based on where investors and liquidity sit, while anchoring the legal record on the chain they consider most suitable for that role.
For the networks involved, this kind of arrangement is a form of competition on reliability and institutional acceptance rather than on speculative activity. Being selected as the register of record for a regulated fund is a different kind of endorsement than hosting trading volume.
9. Risks investors still face
Putting the ownership record on Ethereum does not change the economics of the investments inside the fund. The roughly 7% figure is a target, not a guarantee, and returns can fall short of it.
The fund's bond holdings remain exposed to the usual risks of fixed income. Rising interest rates can push bond prices lower, and issuers can run into financial difficulty, which raises credit risk. None of these risks depends on which ledger tracks ownership.
Investors in a fund with an on-chain register also need to understand how their holdings are recorded and accessed, since the token is the legal evidence of their stake. The involvement of BNY for wallet infrastructure and an independent depositary is designed to provide institutional safeguards around that process.
10. What it means for asset managers and crypto infrastructure
For the asset management industry, BAGEY offers a working example of a regulated fund that runs its ownership register natively on a public blockchain, rather than a proof of concept or a sandbox trial. Competitors weighing tokenization now have a live UK structure to study, backed by a clear regulatory statement.
For crypto infrastructure, the launch shows public networks being used for a core legal function in traditional finance. Ethereum's role as the definitive register for a supervised fund is a step beyond its use as a venue for trading or settlement experiments.
The wider question is whether other managers follow with native on-chain registers or continue with the two-ledger model. With the FCA's framework in place since April and a well-known Edinburgh firm now operating under it, the UK has a practical template for funds that want the blockchain to be the record of ownership rather than a reflection of it.