This is the kind of headline that looks technical at first glance, and meaningful at second.
On Monday, the SEC granted WisdomTree an exemption allowing broker-dealers to trade its tokenized money market fund, WTGXX, intraday at a fixed $1.00.
In practice, that means WTGXX can change hands on a secondary platform at par, with the broker-dealer providing liquidity. No waiting for end-of-day processing. No constant primary market creations and redemptions.
If your head is spinning and you’re wondering what really separates a tokenized money market fund from a stablecoin — given that the latter can be backed by the former, both move on the same rails, and both ideally trade at $1.00 — you’re not alone.
With 24/7 liquidity and continuous yield, many investors will now wait impatiently for WTGXX to become more widely available beyond WisdomTree’s core institutional channels.
In today’s edition, we take you behind the scenes of:
Luxembourg greenlights crypto in UCITS: What’s next for Europe’s fund industry?
BNP Paribas natively issues money market fund shares on Ethereum
HIGH SIGNAL NEWS
Meta is reportedly preparing to support stablecoins. According to CoinDesk, the tech giant has issued a request for proposal to third-party firms to help administer stablecoin-based payments, with Stripe said to be the frontrunner. 🪙
FCA selects 4 firms, including Revolut, to test stablecoin innovation. In addition to the neobank, the UK financial regulator has selected Monee Financial Technologies, ReStabilise, and VVTX. Testing begins in Q1 2026, and the findings will help shape the UK’s final stablecoin rules later in 2026. 🇬🇧
Canton working group completes first cross-border intraday repo with tokenized Gilts. This round of transactions included an intraday repo transaction executed using tokenized Gilts against non-GBP tokenized deposits. Participants in the working group notably include London Stock Exchange Group, Euroclear, Citadel Securities, DTCC, and Société Générale. 🌐
The SEC applies a 2% capital haircut to stablecoins held by broker-dealers. As a result, regulated U.S. stablecoins are now treated nearly on par with short-term debt instruments, such as money market funds, under the Net Capital Rule, which requires U.S. broker-dealers to maintain a minimum level of liquid capital to protect clients and ensure their solvency. 🇺🇸
TOP STORY
Luxembourg Greenlights Crypto in UCITS: What It Means for Europe’s Fund Industry
What happened: In early February, Luxembourg’s financial regulator, the CSSF, published a landmark update to its rules on crypto-assets for investment funds. For the first time since banning crypto exposure in 2018, it now allows UCITS, Europe’s most widely used retail fund structure, to allocate up to 10% of their portfolio to crypto. The exposure must come through eligible securities, such as Exchange-Traded Products (ETPs).
Why it matters: Luxembourg is the largest fund domicile in Europe, administering roughly €5 trillion in UCITS assets. A fund approved there can be distributed to retail investors across more than 30 countries through a single passport. When the CSSF revises the rules for UCITS, it often shapes the direction of the broader European market.
Behind the scenes: To better understand what this move means for digital assets inside Europe’s fund industry, Blockstories spoke with:
CoinShares, one of Europe’s leading crypto ETP providers.
VanEck Europe, a prominent UCITS ETF issuer and European subsidiary of U.S.-based VanEck.
Allfunds Blockchain, the digital arm of Europe’s largest fund distribution platform.
Woud Law, a Luxembourg-based law firm advising clients with a particular focus on the digital assets industry.
__________________
1/ What exactly did the CSSF allow?
UCITS may now gain indirect crypto exposure through physically backed crypto ETPs and ETNs from issuers such as 21Shares, WisdomTree, CoinShares, or VanEck, which trade on regulated exchanges. Direct holdings of Bitcoin or Ether remain off-limits. The route is strictly through regulated, exchange-listed instruments with no leverage.
The 10% crypto cap is aligned with the so-called “trash ratio,” a long-standing UCITS provision that allows funds to allocate up to 10% of their NAV to non-standard assets such as private equity or real estate.
Separately, the CSSF also clarified that UCITS may now hold regulated stablecoins, so-called e-money tokens under MiCAR, for the sole purpose of processing subscriptions and redemptions.
2/ What type of products does this unlock?
The most obvious first movers are multi-asset funds, which already allocate across equities, bonds, commodities, and alternatives. In Luxembourg alone, these funds account for roughly €870 billion.
"We don't expect anything radically new for now. What I see coming is simply traditional UCITS products adding a small crypto allocation to their existing portfolio, because the market conversation has clearly opened the door to that kind of exposure."
The bigger implication is for retail access. Once crypto exposure sits inside UCITS, retail clients gain access through the same banking interface they already use for savings and investments.
“Previously, distribution was limited to private banks or professional investors. But the clarification provided by the CSSF clearly changes the landscape. Many players, both traditional institutions and crypto-native firms, have been waiting for this signal for several months now.”
3/ How quickly will the market move?
Probably slower than the headline suggests. The rule is effective immediately, but UCITS prospectus changes in Luxembourg are procedurally heavy. Managers need to update risk disclosures, notify investors, and in some cases get board approval.
The first crypto-enhanced UCITS could realistically launch by mid-2026. When they do, they’ll likely encounter demand that has been building for years.
"I've seen a lot of questions from institutional investors over the past two, three years asking: could we invest via our UCITS? And we always had to say no, because your fund is in Luxembourg. Now that changes — but I wouldn't call this an active campaign. It's more reactive. Investors will come to us, and we'll be ready."
4/ Why does the stablecoin provision matter?
The quieter update may prove equally important over time.
UCITS rules strictly govern what a fund can hold on its balance sheet, even temporarily. Until now, accepting a stablecoin subscription could have created compliance issues, even if held briefly during settlement.
By allowing regulated stablecoins purely for processing subscriptions and redemptions, the CSSF removes a friction point as fund servicing infrastructure becomes more digital.
“As a global hub for fund structuring, the Luxembourg government is preparing for a transition toward onchain financial infrastructure. The introduction of stablecoins as eligible cash fits perfectly within this long-term strategy.”
5/ What does this imply for the rest of Europe?
UCITS funds domiciled in Luxembourg can be sold across the entire EU and beyond via the UCITS passport. That creates direct competitive pressure, particularly on the Central Bank of Ireland, which oversees Europe's second-largest UCITS domicile and has not yet responded.
“Why would a manager remain in more restrictive jurisdictions when they can domicile in Luxembourg, add crypto exposure, and distribute across Europe?”
The pressure may be short-lived, however. EU-wide harmonization of UCITS eligibility rules could come as early as next year. In its recent review of the Eligible Assets Directive, published last June, ESMA indicated that indirect crypto exposure might be possible within a 10% limit. Luxembourg, in other words, may simply be front-running what will soon become the European standard.
__________________
KEY TAKEAWAYS
Luxembourg is opening UCITS to crypto. The CSSF now allows UCITS to allocate up to 10% of NAV to crypto via eligible instruments like physically backed ETPs — the first such move by a major European fund domicile.
Retail access is the real unlock. Rather than new products, existing multi-asset UCITS can now add crypto allocations, giving millions of retail investors exposure through their existing banking infrastructure.
UCITS can now hold regulated stablecoins, highlighting Luxembourg’s long-term tokenization strategy.
Pressure on other domiciles is building. Luxembourg-domiciled UCITS can be distributed across 30+ countries via the EU passport, forcing restrictive jurisdictions like Ireland to respond, although EU-wide harmonization could follow as early as next year.
BitGo: Business Development Representative, Frankfurt 🇩🇪
Boerse Stuttgart Group: Product Manager (Seturion), Stuttgart 🇩🇪
Citi: Senior Compliance Officer - Services Digital Assets, Dublin 🇮🇪
Crypto.com: Product Director, Banking Engagement, Paris 🇫🇷
Deka: Product Manager Digital Assets, Frankfurt 🇩🇪
Deutsche Bank: Infra Vendor Manager - Digital Assets, Frankfurt 🇩🇪
MarketVektor Indexes: Index Specialist, Digital Assets and Fixed Income, Frankfurt 🇩🇪
Santander: Global Head of Digital Assets, Madrid 🇪🇸
What’s the news?
Last week, the French banking group BNP Paribas announced that it had natively issued a tokenized share of one of its money market funds on Ethereum.
A similar experiment had been conducted in May 2025, but at that time via Allfunds Blockchain, the permissioned infrastructure operated by the fund distributor and administrator.
The tokenization was carried out through AssetFoundry™, one of the group’s in-house tokenization platforms. The shares were issued under a permissioned access model, meaning that holdings and transfers are restricted to eligible and authorized participants.
Behind the scenes: We spoke with Stefan Brinaru, Head of Digital Assets at BNP Paribas Asset Management, about their move onto public infrastructure and what’s now missing to scale this initiative.
Transforming private markets in a retail-driven landscape (Apex Group) — An overview of the retailization of private markets, covering investor demand, regulatory and liquidity constraints, technology (including tokenization), and the rise of outsourcing and lift-outs.
Top Payment trends 2026 (Visa) — An overview of stablecoins shifting from niche concepts to regulated settlement tools, and of AI-driven agentic commerce emerging as the next phase of digital shopping, with implications for payment security, infrastructure, and consumer experience.
Digital Asset Monitor (Deka) — An update of issuance growth, regulatory recalibration, and infrastructure build-out in Germany’s tokenized securities market under the eWpG framework in H2 2025.
→ Want more? Visit Blockstories Library for a curated selection of 120+ reports on digital assets.
What do you think of today's briefing?
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.