BNP Paribas Asset Management (‘BNPP AM’) announced the launch of natively tokenised Money Market fund shares, testing cross-border transactions based on Distributed Ledger Technology (“DLT”), in collaboration with Allfunds Blockchain as tech provider and BNP Paribas’ Securities Services business as transfer agent and dealing services provider. This innovative initiative follows the 2024 Eurosystem wholesale CBDC¹ experimentations and marks another significant step in the development of digital assets for BNPP AM clients.

By issuing a native tokenised share class of an existing money market fund in Luxembourg, BNPP AM is leveraging the fund’s tracking history and processing cross-border transactions with a French counterparty. The primary objective of this pioneering project is to use the blockchain-based system to enhance operational efficiency and provide real-time information on subscriptions and redemptions. Specifically, having the shares natively tokenised enables on-chain instantaneous order execution based on the NAV receipt instead of today’s batch driven order execution. It also enables faster and more efficient settlements for clients in the future, as previously achieved within the Eurosystem experimentations.

Blockchain can enable the distribution of Money Market Funds (“MMFs”) beyond institutional investors, making them accessible to a broader retail investor base. MMFs offer high liquidity and allow investors to access their funds according to their financing needs, while DLT adds increased efficiency and security. This initiative demonstrates BNPP AM’s commitment to innovation and digital transformation, as well as its dedication to providing clients with innovative and more efficient solutions for managing their assets.

Thibault Malin, Deputy CIO of Money Market Funds, BNP Paribas Asset Management:

“Tokenised MMFs and digital cash solutions, such as wholesale Central Bank Digital Currencies (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. At BNP Paribas Asset Management, we are committed to staying at the forefront of financial innovation, embracing cutting-edge technologies that enable us to deliver tailored solutions to our clients and address their evolving needs in a rapidly changing financial landscape.”

Paul Daly, Head of Distribution Products & Solutions, Securities Services, BNP Paribas:

“We were very excited to support BNPP AM with this new initiative in Luxembourg, leveraging our previous experience with Allfunds Blockchain, to explore the potential of natively issued tokens. 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. 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. It is with this in mind that we are proud to further strengthen our foundation to provide services on new digital assets, to our clients, in line with our ambition to provide a seamless aggregated model across traditional and tokenised assets”.

Ruben Nieto, Managing Director of Allfunds Blockchain:

“We are extremely proud and honored to have participated in this major achievement from BNPP AM marking an important milestone in our long-standing collaboration with BNP Paribas. Our blockchain platform has once again demonstrated its versatility and reliability in handling diverse applications and ensuring secure transactions. Native tokenization of MMFs will allow 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. We are looking forward to participating in further developments around tokenised MMFs as they have the potential to become a cornerstone of the digital assets’ ecosystem”.

Source: BNP Paribas