- BNP Paribas Asset Management launched a fully digital share class of a money market fund on the Allfunds blockchain.
- The project involved a cross-border transaction with a French institution, using the new digital shares.
- The move enables faster, on-demand transactions and could lead to quicker settlements when central bank digital infrastructure expands.
- Interest in tokenized money market funds is growing, with potential to reach both institutional and retail investors.
- Other major managers including BlackRock and Franklin Templeton have also issued tokenized funds on blockchains.
BNP Paribas Asset Management recently issued a natively digital share class of a money market fund using the Allfunds blockchain platform. This project allowed the creation of fully digital shares, which were then used for a cross-border transaction involving a French counterparty. The development aims to provide efficient fund management and faster, more flexible transactions.
BNP Paribas Asset Management acted as transfer agent and service provider, while Allfunds Blockchain contributed the digital infrastructure. The digital fund structure allows investors to make subscription and redemption requests at any time, based on current net asset values, rather than waiting for batch processing. Officials see the potential for even quicker settlements as the European Central Bank develops its digital ledger technology (DLT) for wholesale transactions. BNP Paribas recently participated in the European Central Bank’s DLT settlement trials.
Officials say tokenized money market funds are attracting attention beyond traditional finance, with interest growing among crypto-native firms and individual investors. However, many retail-focused tokenized funds run on public, open blockchains, while the Allfunds Blockchain is a private, permissioned network.
BNP Paribas offers two main blockchain solutions. The first is Neobonds, a private platform built on Digital Asset’s Canton system, which supported a recent sovereign bond issue by Slovenia. That bond used a central bank digital currency (CBDC) for settlement. The second blockchain platform, AssetFoundry, is run by BNP Paribas Corporate and Institutional Banking and operates on the public Ethereum network.
“This project allowed us to gain valuable insights into the distinction between digital representation of a traditional fund share and a native token, that is an imperative step to move to more impactful benefit,” said Paul Daly, Head of Distribution Products & Solutions, Securities Services, BNP Paribas. “Moreover, tokenisation of MMFs gains attention for their potential to broaden distribution with a wider investor base and offer enhanced liquidity through direct trading and instant settlement.”
Other asset managers have also launched tokenized funds. Market capitalizations as of May 11 for tokenized funds on blockchains include: BlackRock ($2.9 billion), Franklin Templeton ($739 million), Janus Henderson ($440 million), WisdomTree ($169 million), and Fidelity ($115 million). Additional issuers include Fidelity International ($48 million), abrdn ($45 million), Wellington ($21 million), and UBS ($17 million).
With this launch, BNP Paribas joins a growing list of financial managers experimenting with fully digital fund share classes and blockchain-based solutions.
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