BNP Paribas Joins BlackRock and JPMorgan in the Rush to Tokenize Funds on Ethereum
BNP Paribas has launched a tokenized share class of a French-domiciled cash market fund on the public Ethereum blockchain. The agency is the largest financial institution in Europe, with over $3 trillion in belongings.
This marks one other vital step in conventional finance’s gradual migration to distributed ledger expertise.
Ethereum RWA Market Tops $15 Billion as BNP Paribas Joins Tokenization Push
The pilot venture, executed by the financial institution’s AssetFoundry platform, permits BNP Paribas to check the integration of public blockchains into closely regulated fund buildings.
However, the financial institution is sustaining strict management over the digital belongings.
The tokenized shares make the most of a permissioned entry mannequin, that means holdings and transfers are cryptographically restricted to a whitelist of approved individuals who meet stringent compliance requirements.
“The initiative was carried out as a one‑off, restricted intra‑group experiment, enabling BNP Paribas to check new finish‑to‑finish processes, from issuance and switch company to tokenisation and public blockchain connectivity, inside a managed and regulated framework,” the financial institution explained.
This walled-garden strategy displays a rising consensus amongst institutional asset managers. They clearly need to make the most of the underlying settlement infrastructure of public networks like Ethereum.
However, these companies nonetheless demand the strict entry controls inherent to conventional monetary programs.
Notably, the initiative follows a previous BNP Paribas pilot that utilized a non-public blockchain in Luxembourg. This pivot alerts a cautious institutional shift towards public networks to seize broader future interoperability.
Money market funds have emerged as the main testing floor for Wall Street’s blockchain ambitions. For institutional traders, tokenizing these funds presents a regulated, yield-bearing various to fiat-backed stablecoins.
Furthermore, conventional fund processing depends on gradual, batch-based settlement programs that may entice capital. Tokenization introduces the chance of atomic, practically instantaneous settlement, vastly enhancing capital effectivity.
“This second issuance of tokenized cash market funds, this time utilizing public blockchain infrastructure, helps our ongoing efforts to discover how tokenization can contribute to larger operational effectivity and safety inside a regulated framework,” Edouard Legrand, chief digital and information officer at BNP Paribas Asset Management, stated in an announcement.
Meanwhile, BNP Paribas joins a crowded area of incumbent heavyweights, including BlackRock, JPMorgan Chase & Co., and Fidelity Investments, all of which have deployed tokenized money market funds on Ethereum.
According to Token Terminal information, Ethereum currently dominates the tokenized asset market, main in stablecoins, commodities, and tokenized funds.
The whole market capitalization of real-world assets on the Ethereum ecosystem, excluding stablecoins, lately surpassed $15 billion, up roughly 200% yr over yr.
The put up BNP Paribas Joins BlackRock and JPMorgan in the Rush to Tokenize Funds on Ethereum appeared first on BeInCrypto.
