BNPP AM Issues Tokenised Money Market Fund Shares on Ethereum

BNP Paribas Asset Management has issued a tokenised share class of a French‑domiciled money market fund, recorded on public blockchain infrastructure, in a sign that European peers are catching-up with US asset managers in the tokenisation stakes.

Franklin Templeton, Blackrock and others like JP Morgan Asset Management have all moved forward with similar launches starting in 2021, but until recently there was little momentum in European markets. This is despite the fact that the EU’s MiCA regulation sets out clear rules for digital assets, which is in contrast with the US where aside from stablecoin rules in the form of the Genius Act the regulatory framework is still being finalised.

Now BNP Paribas Asset Management’s move signals growing interest from EU institutions as the French manager marks a new step in its exploration of fund tokenisation using public blockchain infrastructure. The initiative comes on the back of the manager’s steps in May last year when it issued a tokenised money market fund in Luxembourg on a private blockchain.

This current project differs from last year’s because it’s been issued on a public chain via the BNP Paribas AssetFoundry platform, meaning that the two differ in their technological and operational set ups. Together, they signal BNP Paribas’ “approach to exploring multiple tokenisation and distribution models to better serve the fund managers and their investors”, the firm states.

The latest experiment saw tokenised fund shares being issued on the public Ethereum network, with permissioned tokens to ensure that only eligible participants could hold and transfer them, while enjoying the benefits that public blockchain infrastructure provides.

The one-off, limited intra-group experiment allowed BNPP to test new end-to-end processes spanning from issuance and transfer agency to tokenisation and public‑blockchain connectivity, within a controlled and regulated framework.

The benefits of tokenised money market funds include second-by-second yield payouts, 24/7 operational hours and more regular and flexible processing of fund related operations.