New York Life To Bring Bonds Onchain via Tokenization Pact with Centrifuge

NYLIM manages about $807bn in assets, making it one of the world's largest active asset managers, while Centrifuge's platform supports about $1.64bn in tokenized assets, making it one of the world's largest, according to RWA.xyz.

Under the partnership, the NYLIM Anemoy US High Yield Corporate Bond Segregated Portfolio will be offered through Centrifuge's platform. Investors can subscribe to and redeem shares in the fund using the USD Coin (USDC) stablecoin, while NYLIM will continue managing the underlying portfolio. 

The fund will be available only to eligible investors outside the United States, according to an announcement.

Most tokenized investment products launched to date have focused on US Treasury funds and money market products. According to RWA.xyz, tokenized US Treasury products account for $14.7bn of the $31.7bn total tokenized asset market, making them the largest asset class onchain. 

Joni Zhuleku, chief research specialist at Altcoin Pro, said the move into high-yield corporate bonds suggests the tokenized asset market is expanding beyond lower-risk investments. "Tokenized corporate bonds offer a middle ground where investors can generate yield without taking on the same level of equity risk," Zhuleku said.

Why high yield bonds?

NYLIM's launch comes as asset managers expand tokenization to fixed-income products.

Bhaji Illuminati, CEO and co-founder of Centrifuge, said the companies chose a high-yield strategy because Treasury and money market products are already widely available onchain.

"High yield is a unique asset. There is a different risk, liquidity and yield profile," Illuminati told Sandmark. "We wanted to prove the technology can handle that complexity and NYLIM brought a strategy with real institutional strength behind it."

High-yield corporate bonds are issued by companies with lower credit ratings and typically pay higher interest rates because they carry more risk.

Illuminati said the success of tokenized money market funds paved the way for more complex assets to move onchain.

Tokenization momentum continues 

The launch adds to a growing number of tokenized investment products from both traditional financial firms and crypto companies. 

Recent developments include cryptocurrency exchange Coinbase's planned launch of tokenized stocks and decentralized finance protocol Ethena's integration with asset manager BlackRock's Aladdin platform.

According to RWA.xyz, the number of tokenized asset holders has also climbed to more than 951,000, up about 13% over the past month, as more financial products move to blockchain networks.

Zhuleku said the launch could also help bring more traditional capital onto blockchain networks.

"The global corporate bond market is measured in the tens of trillions of dollars," he said. "Even if a small percentage of those assets migrate onchain over the next decade, it's a massive opportunity for blockchain infrastructure and the broader digital asset ecosystem."

Looking ahead

Illuminati expects demand to continue growing as investors seek more diversified portfolios onchain.

"The space is maturing and onchcain allocators want to build sophisticated and diversified portfolios," she said. "We believe all great investment products should be available onchain."

Looking ahead, Illuminati said the next phase of tokenization will see tokenized assets used as collateral, trading instruments and reserve assets across both crypto and traditional finance.