BNP Paribas Asset Management (BNPP AM) has launched a project to test natively tokenised Money Market Fund (MMF) shares, using blockchain technology for cross-border transactions.
The initiative, developed in partnership with Allfunds Blockchain and BNP Paribas Securities Services, builds on previous experiments with wholesale Central Bank Digital Currencies (CBDCs) conducted by the Eurosystem in 2024.
BNPP AM has issued a tokenised share class of an existing Luxembourg-based MMF, facilitating transactions with a French counterparty. The new system is designed to improve efficiency by enabling real-time order execution based on Net Asset Value receipt, rather than the traditional batch-driven approach.
Faster settlement times, a key feature of previous Eurosystem experiments, are also expected to benefit clients, the asset manager said.
Thibault Malin, deputy CIO of MMFs at BNPP AM, said: “Tokenised MMFs and digital cash solutions, such as wholesale CBDCs, are crucial in providing our clients with the most effective and efficient business solutions. By leveraging these innovative technologies, we can streamline processes and enhance the overall client experience.”
Paul Daly, head of distribution products and solutions at BNP Paribas Securities Services, noted that the initiative provides important insights into the evolution of tokenised assets.
“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,” he said.
Daly also pointed to tokenisation as a way to “broaden distribution with a wider investor base and offer enhanced liquidity through direct trading and instant settlement”.
Allfunds Blockchain’s managing director, Ruben Nieto, emphasised the broader significance of the project.
“Native tokenisation of MMFs will allow [us] to fully digitise the lifecycle of those products for which investors and asset managers alike are demanding shorter timeframe and more reactivity especially in the order placement and execution,” he said.
The project reflects growing interest in tokenisation, as firms explore ways to integrate blockchain into asset management and trading. Beyond potential operational improvements, blockchain technology could widen access to MMFs, making them available to retail investors as well as institutions. MMFs provide liquidity to investors seeking flexible financial management, while Distributed Ledger Technology adds security and transaction speed.
Read how BNP Paribas’ banking arm is working on a tokenised future and how LGIM has already begun its tokenised MMF journey.
