BNP Paribas Asset Management has taken another step in exploring fund tokenisation, issuing a tokenised share class of a French-domiciled money market fund on the public Ethereum blockchain using a permissioned access model.
The initiative, conducted as an intra-group experiment, brings together BNP Paribas Asset Management, BNP Paribas CIB’s AssetFoundry™ tokenisation platform, and the bank’s Securities Services division. The project tests new end-to-end operational processes within BNP Paribas’ internal infrastructure.
This integrated structure is notable. Rather than tokenising a fund in isolation, the pilot examines how blockchain infrastructure could support the full lifecycle of fund operations, including dealing services, custody and wallet management, and investor transfers within a regulated framework.
The tokenised share class was issued on the public Ethereum network but operates under a permissioned access model, ensuring that holdings and transfers remain restricted to authorised participants while still benefiting from the security and interoperability of public blockchain infrastructure.
For BNP Paribas, the project builds on an earlier tokenised money market fund initiative launched in Luxembourg using a private blockchain. By experimenting with both private and public infrastructure models, the bank is exploring how different technological frameworks could support regulated fund distribution and settlement.
Why Money Market Funds Are Emerging as Tokenisation’s “Killer App”
Money market funds are increasingly viewed as one of the most practical use cases for tokenisation within regulated finance. These funds already serve as core liquidity instruments for corporate treasurers, institutional investors, and asset managers managing short-term cash positions.
Globally, money market funds hold more than $7 trillion in assets, acting as a key component of the financial system’s liquidity infrastructure. Their daily liquidity, stable value structures, and role as cash management vehicles make them particularly suited to digital representation on blockchain networks.
Tokenisation could significantly improve how these funds operate. Traditional fund infrastructure relies heavily on batch-based processing cycles and multiple intermediaries for subscriptions, redemptions, settlement, and transfer agency services. Tokenised fund shares, by contrast, could enable near real-time settlement, continuous processing, and programmable ownership transfers, potentially reducing operational complexity while increasing transparency.
For institutional investors, tokenised MMFs could also evolve into on-chain collateral or digital cash equivalents, enabling more efficient liquidity management across digital asset markets and tokenised securities ecosystems.
The concept has already attracted interest from major financial institutions. Early regulated initiatives included Archax, the UK FCA-regulated digital asset exchange, which began offering tokenised access to abrdn money market funds in 2023 using the Hedera Hashgraph network.
Other large asset managers have followed. Franklin Templeton launched its blockchain-enabled OnChain U.S. Government Money Fund, while BlackRock’s BUIDL fund, introduced in partnership with Securitize, has further accelerated institutional interest in tokenised liquidity vehicles.
The Institutional Race Toward Tokenised Liquidity
The rapid emergence of tokenised money market funds reflects a broader shift across global finance as asset managers, banks, and market infrastructure providers explore how blockchain technology could reshape the distribution and settlement of traditional financial assets.
Major institutions are increasingly treating tokenisation not as a speculative experiment but as a potential evolution of financial market infrastructure. Franklin Templeton’s early blockchain-based fund demonstrated that regulated investment vehicles could operate on distributed ledgers, while BlackRock’s BUIDL fund highlighted the growing demand for tokenised liquidity instruments within digital asset markets.
Banks are also moving to position themselves within this ecosystem. Institutions such as JPMorgan have explored tokenised collateral and settlement infrastructure, while several European banks are experimenting with digital fund issuance models.
Within this landscape, BNP Paribas’ latest pilot stands out for its focus on operational integration. By combining asset management, tokenisation infrastructure, and securities services within a single institutional framework, the bank is testing how blockchain technology could support the full lifecycle of regulated fund operations.
While tokenisation of traditional financial assets remains at an early stage, money market funds could become one of the first areas where blockchain-based infrastructure gains meaningful institutional traction. As financial markets continue to explore digital settlement rails and tokenised securities ecosystems, tokenised liquidity instruments may increasingly serve as a bridge between traditional finance and emerging digital capital markets.
