BNP Paribas AM Debuts Tokenised MMF
A press release titled, "BNP Paribas Asset Management launches first natively tokenised money market fund shares on Allfunds Blockchain," tells us, "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 fund dealing services provider. This innovative initiative follows the 2024 Eurosystem wholesale CBDC experimentations and marks another significant step in the development of security tokens 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 will enable on-chain instantaneous order execution based on the NAV receipt instead of today's batch driven order execution. In the future, it will also enable faster and more efficient settlements for clients, as previously achieved within the Eurosystem experimentations." Thibault Malin, Deputy CIO of Money Market Funds, BNP Paribas Asset Management, comments, "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, adds, "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 security tokens, to our clients, in line with our ambition to provide a seamless aggregated model across traditional and tokenised assets."
