BNP Paribas uses tokenization to speed up money market fund transactions and reduce delays in settlement.
The new fund uses blockchain to allow direct processing of digital shares based on real-time asset value.
The project may attract retail investors by offering faster access and lower barriers to fund investment.
BNP Paribas Asset Management has introduced a tokenized money market fund. This move tests blockchain's role in traditional finance. The project uses native tokenization and distributed ledger technology to improve cross-border transactions.
https://twitter.com/Cointelegraph/status/1926730060641231351 Fund Based in Luxembourg, Uses Digital Shares
The fund issues a digital share class from an existing money market fund based in Luxembourg. It allows direct processing once the net asset value is available. This reduces delays often seen in batch-based systems. The technology makes transactions faster and more transparent. Investors get quicker access to their funds and information.
BNP Paribas teamed up with Allfunds Blockchain to power the technology. The bank's Securities Services unit acts as transfer agent. It also handles fund dealing services. This ensures full support throughout the fund’s digital lifecycle.
This collaboration strengthens the bank’s testing of digital assets. It also aligns with recent central bank digital currency trials across Europe.
Pilot Builds on Wholesale CBDC Trials
This pilot connects with the 2024 Eurosystem wholesale CBDC trials. The aim is to explore the potential of security tokens. These tokens may improve asset management in regulated financial sectors. They can also bring automation and reduce operational friction.
By adopting tokenization, BNP Paribas seeks to lower costs and enhance efficiency in fund trading. Instant settlement becomes possible with blockchain’s decentralized framework.
Retail Access May Grow With Digital Funds
This move could expand access to money market funds. The use of tokens might attract not only institutions but also retail investors. Digital access helps simplify transactions and supports round-the-clock operations.
Retail users could benefit from reduced barriers and easier entry into investment markets. It also allows them to manage their assets without long delays.
Native Tokenization Seen as Key to Future Growth
The project highlights BNP Paribas’ focus on financial innovation. Native tokens may offer better trading, access, and settlement than digital versions of traditional shares. These tokens also integrate digital and legacy systems more efficiently.
This shift shows the growing importance of blockchain in asset management. It marks a step toward more secure and streamlined operations in finance.
BNP Paribas aims to use the findings to assess long-term digital strategies. The bank positions itself to adapt to future market changes through technology.