BNP Paribas Asset Management (BNPP AM) has issued a natively digital share class of a money market fund (MMF) on the Allfunds blockchain. The vast majority of tokenized funds are based on existing funds and tend to tokenize current share classes rather than creating a new natively digital share class. The new shares were then used in a cross-border transaction with a French counterparty.
BNP Paribas AM acted as transfer agent and dealing services provider, with Allfunds Blockchain as the technology partner. The appeal of the solution is the efficiencies and the ability to move away from batch subscription and redemption to on-demand transactions based on NAV valuations. Plus, there’s potential for faster settlement once the European Central Bank rolls out its wholesale DLT settlement solution. BNP Paribas took part in the ECB’s wholesale DLT trials last year.
Currently there’s significant interest around the potential of tokenized money market funds beyond traditional institutional investors to include crypto-native institutions and retail investors. With this step, BNPP AM is exploring that potential as well. However, the retail-focused solutions tend to be on permissionless blockchains, whereas the Allfunds Blockchain appears to be a private permissioned one.
BNP Paribas blockchain solutions
BNPP itself has two blockchain solutions. One is the private permissioned Neobonds platform, based on Digital Asset’s Canton, used for the recent issuance of a sovereign bond by Slovenia. That transaction used a wholesale CBDC issued as part of the ECB’s trial. The other blockchain solution is AssetFoundry which sits within BNP Paribas CIB and is based 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.”
With this announcement, BNP Paribas becomes the latest to issue a tokenized MMF. Below are a few other asset managers that have issued tokenized funds and their market capitalizations.
| TradFi Asset manager | $ millions (11 May) |
| BlackRock | 2,924 |
| Franklin Templeton | 739 |
| Janus Henderson | 440 |
| WisdomTree | 169 |
| Fidelity | 115 |
| Fidelity Intl | 48 |
| abrdn | 45 |
| Wellington | 21 |
| UBS | 17 |
