BNP Paribas Taps Ethereum for Money Market Tokenization Pilot: TradFi Meets Blockchain
What is the Big News from BNP Paribas?
In a major step for traditional finance, or TradFi,
Money market funds are safe investment options that hold short-term debt like Treasury bills. Tokenizing them means turning shares into digital tokens on a blockchain. This makes them easier to trade, transfer, and manage.
How Does This Ethereum Tokenization Work?
BNP Paribas created permissioned tokens on Ethereum. This means only approved investors can hold or move these tokens. It keeps things secure and follows rules, while using Ethereum’s strong public network.
“The tokenized fund shares were issued on the public Ethereum network with permissioned tokens ensuring that only eligible participants can hold and transfer the tokens, while benefiting from the strength and broad adoption of public blockchain infrastructure,” BNP Paribas stated.
This is their second trial. The first one in 2025 used a private blockchain. Now, they chose public Ethereum for better efficiency and security.
Edouard Legrand, BNP Paribas Asset Management’s chief digital and data officer, said: “This second issuance of tokenized money market funds, this time using public blockchain infrastructure, supports our ongoing efforts to explore how tokenization can contribute to greater operational efficiency and security within a regulated framework.”
Why Ethereum? Benefits of Public Blockchains for Tokenization
Ethereum is the top blockchain for smart contracts and DeFi. Its wide use means more liquidity and trust. For big banks like BNP Paribas, public chains offer:
- Speed and low costs: Faster settlements than old systems.
- Transparency: Blockchain records are public and hard to change.
- 24/7 access: No bank hours needed.
- Regulated access: Permissioned tokens keep it compliant.
Tokenization cuts middlemen, reduces errors, and opens global markets. It’s a win for investors wanting quick, cheap access to funds.
BNP Paribas is Not Alone: Other TradFi Giants on Board
This move fits a trend. Wall Street is racing to tokenize assets on blockchains.
- BlackRock: Their BUIDL fund is the biggest tokenized Treasury product. It runs mostly on Ethereum, with over $500 million in value. Available on Ethereum, Arbitrum, and more.
- Franklin Templeton: Uses Ethereum, Arbitrum, and Avalanche for money market funds.
- WisdomTree: Offers Ethereum-based funds and expanded to Solana in January.
BlackRock CEO Larry Fink has pushed tokenization since 2022. He sees all assets – stocks, bonds, real estate – going on blockchains.
The Future: $35 Trillion Tokenization Market by 2030
Experts predict huge growth. Grayscale, a crypto asset manager, says the tokenization market could reach $35 trillion by 2030. This includes commodities, private equity, credit, and more on blockchains.
Why so big? Tokenization brings:
| Old Finance | Tokenized Finance |
|---|---|
| Slow paper trades | Instant digital transfers |
| High fees | Low blockchain costs |
| Limited access | Global 24/7 markets |
| Less accountability | Immutable records |
Proponents say it will make finance cheaper, safer, and more open.
What This Means for Crypto and TradFi
BNP Paribas’s
It creates new use cases: Institutions can park cash in tokenized funds earning yield on-chain. This boosts Ethereum demand and bridges TradFi with DeFi.
Challenges remain: Regulators must approve more. Tech needs to scale. But with leaders like BlackRock and BNP Paribas, tokenization is here to stay.
Key Takeaways from BNP Paribas Ethereum Pilot
- Second tokenized money fund trial, first on public Ethereum.
- Permissioned tokens for compliance.
- Part of Wall Street’s blockchain shift.
- Potential for trillions in tokenized assets.
Watch for more banks following. Tokenization could redefine how we invest.
Stay tuned for updates on blockchain in finance. What do you think – will all assets be tokenized soon?
