Europe's Biggest Bank Goes Public Chain
BNP Paribas Asset Management, the investment arm of Europe's largest bank by total assets, has tokenized a share class of a French-domiciled money market fund directly on Ethereum. The announcement, reported by The Block on February 20, 2026, marks the first time the $1,600 billion asset manager has used a public blockchain for fund tokenization, after previously testing the concept on a private chain in Luxembourg.
The tokenized shares were issued through BNP Paribas' in-house AssetFoundry platform, with BNP Securities Services acting as transfer agent and fund dealing services provider. The bank's Securities Services division also handled wallet setup and private key management. In other words, BNP Paribas controlled the entire pipeline from issuance to custody, all running on Ethereum's public infrastructure.
"This second issuance of tokenised money market funds, this time using public blockchain infrastructure, supports our ongoing efforts to explore how tokenisation can contribute to greater operational efficiency and security within a regulated framework," said Edouard Legrand, Chief Digital and Data Officer at BNP Paribas Asset Management.
Why the Shift From Private to Public Matters
The tokenized finance conversation has spent years stuck on a fundamental question: will traditional institutions ever trust a public, permissionless blockchain? BNP Paribas just answered with a live pilot.
Their previous tokenization effort, a Luxembourg-domiciled money market fund issued on Allfunds Blockchain (a private chain), was a controlled experiment. The infrastructure was familiar. The counterparties were known. The regulatory surface area was narrow.
Moving to Ethereum is a different proposition. Even with a "permissioned access model" that restricts holdings and transfers to eligible and authorized participants, the underlying settlement layer is the same Ethereum used by DeFi protocols, NFT markets, and stablecoin networks. The fund's existence is verifiable onchain. That transparency is exactly what private chains cannot offer.
Julien Clausse, Head of AssetFoundry at BNP Paribas CIB, framed the pilot as an operational learning exercise: the initiative "allows us to better understand the operational and governance implications of tokenisation." But the subtext is clear. If you are testing governance implications on Ethereum, you are planning for a future where Ethereum is the rails.
The $14.4 Billion Tokenized Fund Race
BNP Paribas is not moving in isolation. Tokenized real-world assets, particularly US Treasuries and money market instruments, have exploded from a niche experiment to a $14.4 billion market as of early 2026.
BlackRock's BUIDL fund leads the category with nearly $3 billion in assets under management and roughly 45% market share among tokenized treasury products. The fund has been accepted as collateral on Binance and expanded to BNB Chain, blurring the line between TradFi yield and DeFi composability.
Franklin Templeton's BENJI token represents over $800 million in a US-registered government money market fund, with shareholder records maintained across seven different blockchain networks.
What separates BNP Paribas from these competitors is geography and regulatory context. BlackRock and Franklin Templeton operate under US frameworks. BNP Paribas is navigating MiCA (the EU's Markets in Crypto-Assets Regulation), French fund domiciliation rules, and the European Central Bank's evolving stance on digital securities. A successful Ethereum-based MMF pilot in France under these constraints sends a signal to every European asset manager still waiting on the sidelines.
The bank described this as a "one-off test," but the infrastructure they built, AssetFoundry as the tokenization and connectivity layer, BNP Securities Services handling transfer agency and wallet management, suggests permanent architecture, not a disposable sandbox.
What This Means for the Stablecoin and Yield Landscape
Tokenized money market funds matter to crypto users because they represent yield-bearing alternatives to stablecoins. A USDC holder earns nothing unless they actively deposit into a DeFi protocol. A tokenized MMF share earns the underlying money market rate (currently around 3.5-4% in EUR-denominated funds) by default.
If BNP Paribas scales this beyond a pilot, European investors could hold tokenized MMF shares in the same wallets they use for crypto spending. The fund shares settle onchain. The yield accrues automatically. The redemption path runs through the same Ethereum infrastructure that powers stablecoin cards and DeFi lending protocols.
This creates competitive pressure on stablecoin issuers. Tether and Circle currently capture the float on their reserves (earning yield on US Treasuries and money markets backing USDT and USDC) while passing zero of that yield to holders. Tokenized MMFs pass the yield directly to the token holder. As more banks follow BNP Paribas onto public chains, stablecoin issuers face a choice: start sharing yield, or watch capital migrate to tokenized fund products that do.
ProShares recently launched IQMM, the first money market ETF built specifically for GENIUS Act stablecoin reserves. The convergence between traditional money market products and crypto-native yield infrastructure is accelerating from both directions.
The Broader Institutional Signal
BNP Paribas manages over 1,600 billion euros in assets following its acquisition of AXA Investment Managers, making it the third-largest European asset manager. When a bank of this scale builds internal tokenization infrastructure (not outsourcing to a crypto-native vendor, but building AssetFoundry in-house) and deploys it on Ethereum, it validates the technology stack for every peer institution watching.
This follows a pattern visible across 2025-2026:
- BlackRock's BUIDL fund reached $3 billion on Ethereum
- The SEC's tokenized securities exemption framework, outlined at ETHDenver, is creating regulatory clarity in the US
- Abu Dhabi sovereign funds accumulated over $1 billion in BlackRock's Bitcoin ETF
- Goldman Sachs' CEO admitted to owning Bitcoin personally while the bank builds tokenization capabilities
The common thread is public blockchain adoption by entities that spent the previous cycle insisting private chains were sufficient. They were not. Private chains could not attract liquidity, interoperate with existing DeFi infrastructure, or offer the transparency that institutional compliance teams increasingly demand.
For Crypto Card Users: Why Fund Tokenization Matters
If you hold a crypto card funded by stablecoins, the BNP Paribas pilot points toward a future where your card balance could earn money market yields while sitting in your wallet. Today, topping up a crypto card with USDC means your funds stop working until you spend them. Tokenized MMF shares could change that dynamic: hold yield-bearing tokens, spend them at the point of sale through a crypto-to-fiat conversion, and earn 3-4% APY in the meantime.
Several self-custody card providers already support spending from DeFi positions. If tokenized MMFs become composable with card infrastructure, idle card balances become productive by default. MetaMask's recent auto-yield routing for stablecoins hints at how this user experience might work in practice.
The catch, as always, is regulatory. Tokenized MMF shares are securities. Spending them requires a redemption event that may trigger tax obligations in most jurisdictions. But the infrastructure is being built today, and BNP Paribas just proved it works on Ethereum.
FAQ
Is BNP Paribas launching a tokenized fund product for retail investors? Not yet. The Ethereum pilot is described as a "one-off test" with a permissioned access model restricted to eligible and authorized participants. Retail access would require additional regulatory approvals.
How does this differ from BNP Paribas' previous tokenization effort? The earlier pilot tokenized a Luxembourg-domiciled money market fund on Allfunds Blockchain, a private chain. This new pilot uses public Ethereum infrastructure via BNP Paribas' AssetFoundry platform, representing a significant architectural shift.
What is AssetFoundry? AssetFoundry is BNP Paribas CIB's in-house tokenization platform. It handles token issuance, provides the connectivity layer to Ethereum, and integrates with BNP Securities Services for transfer agency, wallet setup, and private key management.
How large is the tokenized treasuries and money market fund market? As of early 2026, tokenized funds (treasuries, money market instruments, and similar yield-bearing products) have crossed $14.4 billion in total value. BlackRock's BUIDL fund leads with nearly $3 billion in AUM.
Does this affect stablecoin holders? Indirectly, yes. Tokenized MMFs pass yield directly to holders, unlike stablecoins where issuers keep the float income. As more tokenized yield products launch on public chains, stablecoin issuers face pressure to share yield or lose capital to competing instruments.
Overview
BNP Paribas Asset Management has tokenized a French money market fund share class on Ethereum using its in-house AssetFoundry platform, marking the first time Europe's largest bank has deployed fund tokenization on a public blockchain. The pilot tested end-to-end processes including issuance, transfer agency, and wallet management, all under a permissioned access model compliant with EU regulations. While described as a one-off test, the permanent infrastructure BNP Paribas built, and the deliberate shift from private to public blockchain, signals that major European institutions are choosing Ethereum as the settlement layer for tokenized securities. For crypto users, this accelerates the convergence between traditional yield products and the onchain infrastructure that powers stablecoin spending, DeFi lending, and crypto card top-ups.
Recommended Reading
- ProShares Launches IQMM, the First Money Market ETF Built for GENIUS Act Stablecoin Reserves
- MetaMask Now Auto-Routes Stablecoin Swaps Into Yield-Bearing Tokens So Your Idle Dollars Never Stop Earning
- SEC Chair Atkins and Commissioner Peirce Outline a Tokenized Securities Exemption at ETHDenver
