BNP Paribas Asset Management (BNPP AM) has announced the launch of natively tokenised Money Market fund (MMFs) shares, testing cross-border transactions based on Distributed Ledger Technology (DLT).

By issuing a native tokenised share class of an existing money market fund in Luxembourg, BNPP AM said it is using the fund's tracking history and processing cross-border transactions with a French counterparty.

The main goal of the initiative is to use the blockchain-based system to boost operational efficiency and provide real-time information on subscriptions and redemptions.

"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," said Thibault Malin, deputy CIO of money market funds, BNPP AM. "By leveraging these innovative technologies, we can streamline processes and enhance the overall client experience."

The initiative, launched in collaboration with Allfunds Blockchain as a tech provider and BNP Paribas’ Securities Services business as transfer agent and dealing services provider, follows a set of Eurosystem wholesale CBDC experimentations last year.

"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, BNPP AM. "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”.

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