BNP Paribas Tests Ethereum for Money Market Funds in Shift From Private Blockchain

BNP Paribas Tests Ethereum for Money Market Funds in Shift From Private Blockchain

BNP Paribas Asset Management has issued tokenized shares of a French money market fund on the public Ethereum network, marking a departure from the bank's earlier experiments with private blockchain infrastructure and signaling growing institutional comfort with public networks for regulated financial products.

The tokenized shares were issued under a permissioned access model that restricted holdings and transfers to eligible and authorized participants—essentially bringing traditional fund gatekeeping to a public blockchain. For CFOs watching the tokenization wave, this represents a meaningful technical pivot: BNP Paribas previously issued a tokenized money market fund in Luxembourg on a private blockchain, but this second iteration uses entirely different technological and operational infrastructure.

The project deployed BNP Paribas across its organizational chart. The asset management arm acted as fund issuer, while BNP Paribas Securities Services handled transfer agent and fund dealing services. The bank's AssetFoundry platform, operated by its corporate and investment banking division, provided the tokenization layer and connectivity to Ethereum's public network.

"BNP Paribas' AssetFoundry platform delivers key digital-assets capabilities, from tokenisation to network connectivity and wallet-related functionalities within a controlled setup," said Julien Clausse, head of AssetFoundry at BNP Paribas. "This initiative allows us to better understand the operational and governance implications of tokenisation for money market funds."

The bank's Securities Services business operated the wallet infrastructure and held the private key for the pilot transaction, keeping custody controls firmly within the regulated entity rather than relying on third-party custodians—a detail that matters considerably for compliance officers evaluating similar projects.

BNP Paribas characterized the initiative as a "one-off, limited intra-group experiment," language that suggests the bank is testing processes rather than launching a commercial product. The pilot enabled the institution to examine end-to-end workflows spanning issuance, transfer agency, tokenization, and public blockchain connectivity within what it described as a "controlled and regulated framework."

The choice of Ethereum is notable. Public blockchains offer transparency and interoperability advantages over private networks, but they also introduce operational complexities around transaction finality, gas fees, and regulatory questions about who operates the underlying infrastructure. By implementing permissioned access on top of Ethereum's public rails, BNP Paribas is essentially testing whether institutions can have it both ways—public infrastructure with private controls.

For finance leaders, the experiment raises practical questions about when tokenized money market funds might move from pilot to production. The technology works, clearly. Whether it works better than existing fund administration infrastructure—and whether the operational savings justify the compliance headaches—remains the open question that experiments like this are designed to answer.