The announcement, made on 20 February 2026, represents a deliberate shift in how one of Europe's largest banks is approaching fund tokenisation. BNP Paribas Asset Management previously issued a tokenised money market fund in Luxembourg using private blockchain infrastructure. This time, the bank moved to the public Ethereum network, using permissioned tokens to restrict holdings and transfers to authorised participants while operating on shared, open rails.

The initiative relies on a permissioned access model on Ethereum, restricting holdings and transfers to authorised participants within a regulated framework. Conducted as an intra-group experiment, the project leverages the joint expertise of BNP Paribas Asset Management, CIB AssetFoundry and BNP Paribas' Securities Services business to test new end-to-end fund processes. The Securities Services division operated wallet infrastructure and held the private keys, while the AssetFoundry platform provided the tokenisation and connectivity layer to the public network.

The choice of public infrastructure matters because of who is making it. BNP Paribas is designated as a Global Systemically Important Bank (G-SIB) by the Financial Stability Board, sitting in bucket 2 alongside institutions like Barclays, Goldman Sachs, and UBS. These are institutions subject to the most stringent capital, resolution, and supervisory requirements in global banking. When a G-SIB determines that public Ethereum meets its operational and governance standards for a regulated fund structure, it is making a statement about infrastructure readiness that smaller market participants cannot make on their own authority.

Money market funds are not experimental products. Regulation (EU) 2017/1131 lays down rules for money market funds established, managed, or marketed in the Union, concerning eligible financial instruments, portfolio composition, asset valuation, and reporting requirements. These funds operate under tight liquidity, diversification, and transparency requirements precisely because they serve as core liquidity management tools for corporate and institutional investors. Tokenising a share class of such a fund on public infrastructure means BNP Paribas is confident that Ethereum can coexist with these regulatory obligations, not replace them, but support them.

The bank is not alone in reaching this conclusion. BlackRock launched its first tokenized fund on a public blockchain, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), in March 2024. BUIDL provides qualified investors with the opportunity to earn U.S. dollar yields by subscribing through Securitize Markets. BUIDL remains the largest tokenized real-world asset product, holding over $2.85 billion in assets. Franklin Templeton has operated its OnChain U.S. Government Money Fund on public blockchains since 2021, making it the first money market fund to use a public blockchain for transaction and ownership tracking. The fund now operates across Ethereum, Polygon, Arbitrum, Stellar, and other networks.

The pattern emerging from these deployments is consistent: regulated fund shares, issued by regulated managers, operating on public infrastructure with permissioned access controls layered on top. The permissioned model restricts transfers and holdings to approved participants, preserving regulatory controls around investor eligibility and fund distribution. The approach blends blockchain-based recordkeeping with conventional compliance requirements.

This matters operationally because it challenges a default assumption many regulated VASPs have been working from: that compliance with traditional securities regulation requires proprietary or permissioned-only infrastructure. The BNP Paribas pilot demonstrates that public blockchain settlement can coexist with regulated fund operations when the access layer is properly controlled. The compliance question is not which network, but how access is governed.

For infrastructure decision-makers at regulated VASPs, the implications are direct. Building private settlement rails from scratch typically means 6-12 months of development, integration with separate custody, banking, and compliance vendors, ongoing maintenance, and a competitive positioning that may not be defensible. If institutional-grade fund tokenisation works on public Ethereum for a G-SIB, the argument for building equivalent infrastructure internally weakens substantially.

According to rwa.xyz, there is approximately $8.7 billion in on-chain U.S. Treasuries, representing about 45% of the total $19.4 billion in tokenised real-world assets. Ethereum holds about 65% of the total value in distributed RWA on chain. The infrastructure concentration suggests that VASPs building proprietary rails are not just duplicating effort, they may also be building toward a liquidity environment that does not exist.

The tension this creates is strategic, not technical. Regulated VASPs have legitimate concerns about counterparty risk, key management, regulatory exposure, and vendor dependency. None of those concerns disappear because a large bank ran a pilot. But the pilot does shift the burden of proof. The question is no longer whether public blockchain infrastructure can support regulated fund operations. It is whether building private alternatives delivers competitive or compliance advantages that justify the cost and delay.

This approach allows BNP Paribas to assess how public blockchains can be integrated into regulated fund structures while maintaining the highest standards of governance, investor protection, and operational robustness. The bank is explicit that this is exploratory, a controlled test of end-to-end processes within an intra-group framework. But the choice to run that test on public infrastructure, not in a sandbox or on permissioned ledger, signals where the institution sees the operational frontier moving.

For VASPs evaluating build-versus-orchestrate decisions during current budget cycles, the calculus has shifted. The compliance argument for proprietary infrastructure has lost its most important institutional backing. What remains is a question of speed, cost, and competitive positioning, and on all three dimensions, the orchestration model now has tier-one precedent behind it.

References

[1] BNP Paribas explores public blockchain infrastructure for money market fund tokenisation

[2] 2025 List of Global Systemically Important Banks (G-SIBs), Financial Stability Board

[3] Regulation (EU) 2017/1131 on money market funds, EUR-Lex

[4] BlackRock Launches Its First Tokenized Fund, BUIDL, on the Ethereum Network, Business Wire