BNP Paribas AM Pilots Tokenized Money-Market Fund

We spoke with Stefan Brinaru, Head of Digital Assets at BNPP AM, about the strategic rationale and the operational details.

Yesterday, Bloomberg reported that BlackRock plans to buy 10% of its preferred stablecoin issuer, Circle, at IPO. Just days earlier, the WSJ revealed that a group of US banks, including JPMorgan, Bank of America, and Citi, is exploring a joint venture to launch their own stablecoin.

The Financial Times might argue that stablecoins are nothing revolutionary — just banks in a new wrapper. And yet, the momentum is clearly on their side.

This week, we sat down with Luca Prosperi, CEO of M0, to unpack what’s really happening behind the scenes — and why the economics of issuance might not be where the real value lies. More on that below.

Here’s what else we’re covering today:

  • Worldpay launches stablecoin payouts

  • BNP Paribas AM pilots tokenized money-market fund

  • HSBC debuts Tokenized Deposit Service

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NEWS FLASH

Stablecoins & Tokenization

Regulation

Investment

TOKENIZATION

BNP Paribas AM Pilots Tokenized Money-Market Fund on Allfunds Blockchain

Fund POC: Through its asset management division, BNP Paribas has issued its first-ever natively tokenized share class within an existing Luxembourg-based money market fund. The tokenized shares were used to settle a cross-border transaction between France and Luxembourg — a proof-of-concept for blockchain-based fund flows across jurisdictions.

  • “We started with a money market fund because it’s a simple, well-understood product, and its established track record is crucial for our institutional clients. By issuing natively tokenized shares within a real fund, we combine familiarity with innovation,” explained Stefan Brinaru, Head of Digital Assets at BNP Paribas Asset Management (BNPP AM), in our conversation.

Partnership with Allfunds Blockchain: The operation was conducted on the permissioned blockchain of Madrid-based Allfunds, a fork of Ethereum. As one of the world’s leading B2B WealthTech platforms, Allfunds is a key IT partner of BNP Paribas Securities Services’ business, providing transfer agency and fund dealing services in the context of this issuance.

What happened in detail: The solution was connected to BNPP AM’s existing IT infrastructure. A portfolio manager placed the order via Aladdin, BlackRock’s investment management platform, which transmitted it to the Allfunds blockchain — responsible for transferring the tokenized fund shares.

  • “For the cash leg, we relied on the Group’s traditional banking systems and processes. The order was executed instantaneously via a smart contract,” Brinaru said.

Efficiency gains: For BNPP AM, the core advantage of blockchain lies in improved efficiency and the ability to access real-time information on subscriptions and redemptions.

  • “If you’re a large corporation planning to invest €100 million in a money market fund, waiting several hours for settlement can be stressful — especially when orders submitted after the cut-off time are typically settled the next day. With this system, in the future, you will hopefully just press a button and the transaction will be completed. It could be a huge improvement.”

BNPP AM’s tokenization strategy: The asset management division has been exploring blockchain since 2018, following a clear strategy: test tokenization projects internally, gain operational insights, and gradually expand to clients. Over the past few years, BNPP AM has tokenized project finance deals, invested in digital and sovereign tokenized bonds, while also participating in ECB-led wholesale CBDC pilot.

What’s next:

  • Wholesale CBDC integration: While the current benefits of tokenization remain limited, BNPP AM believes true value will emerge when digital cash becomes part of the process. The firm plans to integrate wholesale CBDC solutions from the ECB in the near future.

  • BUIDL-type product: BNPP AM is also working on a constant NAV fund — a money market fund with a fixed price per share — to simplify valuation and enable faster processing.

In theory, tokenization was supposed to unlock liquidity in hard-to-trade assets like private credit and real estate. But in practice, the first movers have been the assets that were already liquid — US-dollars and money-market funds.

Money market funds, in particular, have become a favored starting point for asset managers. Among issuers, two distinct strategies are emerging:

  1. Efficiency first (e.g. BNPP AM): Keep the product inside a permissioned environment, plug blockchain into existing workflows, and shave hours off settlement for the same institutional clients.

  2. Distribution first (e.g. BlackRock, Franklin Templeton): Push the fund onto a public chain and tap the growing pool of crypto-native liquidity looking for regulated yield.

Empirically, the distribution-first approach is moving faster. Products like BUIDL and BENJI are already attracting hundreds of millions, while efficiency-focused projects remain largely in pilot mode. But with cash-on-chain infrastructure gaining traction, the gap is closing. Institutions like BNP Paribas are moving from proof-of-concept to production — step by step.

Money market funds are gaining traction in the tokenization space thanks to their flexibility as short-term instruments. They're well-suited for treasury management, FX optimization, and hedging currency risk in international trade. Functioning like cash equivalents within a fund structure, they’re naturally fit for cross-border applications and appeal to institutions seeking versatile tools.

Partnering with Allfunds is a logical move for BNP Paribas AM — not only because of its investment in the firm (in 2020, they bought a 22,5% stake), but also because Allfunds ranks among Europe’s leading fund distribution platforms. That makes it an ideal partner to support the shift toward blockchain-based distribution.

Khai Uy Pham is an adviser in new technologies and innovation for the financial market infrastructures division at Banque de France, where he serves as the cross-border wholesale CBDC lead.

DIGITAL MONEY

HSBC Debuts Tokenized Deposit Service in Hong Kong

First mover: Last week, HSBC became the first bank in Hong Kong to launch a Tokenized Deposit Service for corporate clients, offering instant transfers in Hong Kong dollars and US dollars. The first client? Ant International, the Chinese fintech group behind Alipay, which used the service to complete an intra-group fund transfer.

Behind the flow:

  • The service allows instant payments in Hong Kong dollars (HKD) and US dollars (USD) between corporate accounts held at HSBC Hong Kong, using HSBC’s internal digital ledger infrastructure.

  • The transaction was initiated via Ant’s treasury platform, Whale, and processed by HSBC within its own systems, enabling real-time movement of funds between Ant’s accounts at HSBC.

Sandbox to Production: This live service builds on a pilot project the two firms conducted under the Hong Kong Monetary Authority’s Project Ensemble in October 2024 which explored the potential for tokenized deposits for corporate treasury management. HSBC’s new Tokenised Deposit Service puts those learnings into action — offering 24/7, instant settlement for corporate clients, but within HSBC’s own network for now.

HSBC in tokenization: For HSBC, this marks the latest piece in their tokenization strategy. Since 2022, the bank has been building a tokenization stack:

  • Orion platform (2022): HSBC’s private DLT network for issuing and settling tokenized bonds, enabling atomic (DvP) settlement.

  • Gold tokenization (2023–2024): The bank conducted its first institutional tokenized gold trades in 2023, then expanded to retail clients in Hong Kong in 2024, all via Orion.

  • Digital bond issuance (2023): HSBC issued a HK$1 billion (US$128 million) one-year digital bond on Orion — the first English law digital bond listed on the Hong Kong Stock Exchange.

Tokenized deposits vs. stablecoins: The Tokenized Deposit Service extends this strategy into payments. In a recent podcast, John O'Neill, Head of Digital Assets and Currencies at HSBC, John O’Neill, Head of Digital Assets and Currencies, underscored the bank’s focus on tokenized deposits — describing them as “tokenized commercial bank money” that presents a regulated alternative to stablecoins, which he views as riskier due to broken pegs and market stress.

The details remain somewhat sparse — especially regarding the technical design, how this truly differs from traditional bank infrastructure, and the actual role of blockchain in the system. Still, one thing is clear: the concept of tokenized deposits is gaining momentum with HSBC joining the ranks of JPMorgan, UBS and Citi.

Going forward, the big question is whether banks can connect these siloed systems into a broader, interoperable network. As an expert working on these payment systems explained to us, moving from mirrored internal accounts — like Ant’s Whale platform — to a shared ledger across banks is massively complex: not just technically, but also in terms of compliance, risk management, and the integration with downstream systems like treasury and reporting.

HSBC's entry into the digital cash market is noteworthy as it marks the participation of an established banking player in a sector historically dominated by stablecoins. Within the cross-border payments sector, banking institutions are well-positioned to present a compelling alternative for large corporations and treasurers managing sizeable, high-frequency financial transactions.

Distinct from stablecoin issuers, banks can leverage established customer relationships and operate within existing regulatory frameworks. Furthermore, their ability to settle transactions internally would potentially enable them to streamline processes and navigate around some of the operational challenges that can be associated with public permissionless blockchains.

Cristiano Ventricelli is the Vice President – Decentralized Finance and Digital Assets at Moody’s Ratings, where he’s working on the topics of risk assessment and monitoring for digital assets.

JOB BOARD

A chat with Luca Prosperi, CEO and co-founder of M0, a platform that enables builders and institutions to create their own stablecoins. We asked Luca for his take on the news about US banks exploring joint stablecoin ventures.

  1. Legal Structures of Tokenised Assets (Cambridge) — A comprehensive deep dive exploring three legal models for tokenised assets: fully native, securitised via SPVs, or interface/settlement tokens.

  2. Report: The Future of Stablecoins (M0 & Artemis) — A data-driven analysis on stablecoin design, market trends and use cases. Explores the trade-offs between centralized and decentralized models.

  3. European Stablecoin Adoption (Fireblocks) — A sharp breakdown of Europe’s evolving stablecoin landscape, including MiCA’s impact, key regulatory themes, and why market participants are ramping up preparations.

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Disclaimer: The information provided in the Institutional Briefing by Blockstories does not constitute investment advice. Accordingly, we assume no liability for any investment decisions made based on the content presented herein.

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