BNP Paribas Advances Regulated Finance on Public Blockchains

BNP Paribas is moving beyond experimentation by taking one of its most tangible steps toward integrating regulated financial products directly onto public blockchain infrastructure. The initiative, led by its asset management division, reflects a broader strategic effort to combine traditional finance with distributed ledger technology while maintaining strict regulatory oversight.

The latest project introduces a tokenized share class of an existing French money market fund. Rather than relying on a closed or private ledger, the bank selected Ethereum as the settlement layer. However, the use of a public blockchain does not imply open access. The structure was designed with regulatory controls that restrict participation to approved parties, ensuring alignment with existing financial regulations.

Permissioned Access on a Public Network

Although the tokenized shares are issued on Ethereum, the operational model follows a permissioned framework. Only pre-verified and eligible investors are allowed to hold or transfer the digital shares. This approach was described as a way to combine the transparency and efficiency of a public blockchain with the compliance standards required for regulated financial instruments.

To support this structure, BNP Paribas relied on the ERC-3643 standard, which was developed specifically for regulated digital assets. The pilot covers the entire lifecycle of the tokenized fund, including issuance, transfer administration, and connectivity with the public network. Multiple internal divisions, including asset management, corporate and institutional banking, and securities services, are involved in testing the model end to end.

Building on Prior Blockchain Initiatives

This initiative builds on earlier blockchain efforts by BNP Paribas. The group previously launched a tokenized fund on a private blockchain in Luxembourg in 2025 and issued a renewable energy financing bond directly on Ethereum in 2022. These earlier projects served as stepping stones, gradually increasing the bank’s comfort with on-chain issuance and settlement.

Alongside its internal initiatives, BNP Paribas is also playing a central role in Qivalis, a consortium-based project aimed at launching a Euro-denominated stablecoin. The consortium includes several major European banks, such as ING, UniCredit, BBVA, CaixaBank, DZ BANK, and DekaBank.

Qivalis and the Future of Institutional Payments

The Qivalis stablecoin is designed to be pegged one-to-one with the Euro and backed by segregated reserves, including central bank deposits and short-term government securities. The project has been structured to comply with the Markets in Crypto-Assets regulation and is in the process of applying for an electronic money institution license with the Dutch Central Bank. A commercial launch is currently targeted for the second half of 2026.

Unlike many crypto-based assets, Qivalis is positioned as institutional payment infrastructure rather than a speculative instrument. Its intended use cases include programmable payments through smart contracts, automated settlement of tokenized securities, and real-time liquidity management for multinational corporations. Deployment is expected to begin on Ethereum, with plans to expand to other networks such as Polygon and Base.

The initiative is led by industry veterans, including Jan-Oliver Sell, formerly associated with Coinbase Germany, and Sir Howard Davies, previously chairman of NatWest.

A Hybrid Blueprint for European Finance

Taken together, the tokenized money market fund and the planned Euro stablecoin illustrate a notable strategic shift. Instead of attempting to compete with blockchain infrastructure, major European banks are increasingly choosing to build directly on top of it. BNP Paribas is effectively testing a hybrid model that combines public blockchain settlement and transparency with permissioned access and institutional controls.

This approach is being closely watched as a potential blueprint for deeper integration between traditional financial markets and on-chain infrastructure across Europe. By demonstrating that regulated assets can operate on public blockchains without sacrificing compliance, BNP Paribas is contributing to a model that could shape the next phase of institutional adoption in digital finance.

The post BNP Paribas Advances Regulated Finance on Public Blockchains appeared first on CoinTrust.