crypto strategy

BNP Paribas AM chief rules out crypto push but backs tokenization

BNP Paribas Asset Management, one of Europe’s largest fund management groups, has ruled out joining rivals pushing into cryptocurrencies, saying there is a lack of demand for exposure among its clients.

Instead, the Paris-based bank’s €500 billion asset management arm focuses on using digital technology, including blockchain, to offer tokenized products – where stocks or the shares are represented digitally and can be traded and recorded on a distributed ledger.

“We are not involved in cryptocurrencies and we do not want to be involved. For us, it is about using blockchain technology to access tokens and improve the liquidity of certain products.” Sandro Pierri, CEO of BNP Paribas AM said Financial news.

“We have not heard of significant interest [in cryptocurrencies] of our customers,” he added.

Some of the world’s largest asset managers have launched products offering investors exposure to cryptocurrencies, including BlackRock, which announced in August that it had launched a private bitcoin trust for institutional investors in the United States.

The launch of the trust came just a week after BlackRock unveiled a partnership with crypto exchange Coinbase to give users of its Aladdin platform access to bitcoin.

Invesco, the $1.4 billion US asset manager, launched one of Europe’s first bitcoin products in November 2021 when it rolled out its physical bitcoin ETP. Fidelity International launched a physical bitcoin ETP in Europe in February this year.

Despite the flurry of crypto product launches, Pierri said BNP Paribas AM is not seeing enough demand from its clients, 60% of whom are institutional investors.

“For us, it’s very clear that our focus, at the moment, is on tokenization,” he added.

The asset manager’s colleagues in BNP Paribas’ corporate and institutional banking have already made progress in this area. In July, energy giant EDF issued an ESG tokenized bond through BNP Paribas’ digital asset platform, called AssetFoundry – one of the first renewable energy bond tokenizations on the market.

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The issuance was carried out on the Ethereum blockchain, with BNP Paribas Securities Services managing the custody. BNP Paribas AM was the buyer of the bond via its private debt division.

Several other asset managers have also shown interest in token approaches.

Stephen Bird, CEO of Abrn, said FN in August that tokenization, digital assets, digital exchanges, and blockchain technology would “transform asset management for cost, speed, and control.”

Bird made the comments shortly before Abrn announced he had acquired a stake in digital stock exchange Archax.

In July, Schroders announced that it had purchased a minority stake in Forteus, an asset manager focused on blockchain and digital assets, in a move it said could eventually allow it to offer token funds to investors.

Forteus will offer a range of investment solutions covering custom portfolios from external managers, yield generation, actively managed thematic portfolios and, in the long term, tokenization.

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Peter Harrison, CEO of Schroders, said at the time that blockchain “will be a catalyst for fundamental change in asset management, financial services generally, and many other industries more broadly.”

Meanwhile, Salim Ramji, global head of iShares and index investing at BlackRock, said FN earlier this year, blockchain technology is “incredibly innovative and incredibly disruptive”.

“It removes friction, it allows for easier transfer of value in a way that makes the underlying plumbing of markets much more efficient for customers,” Ramji said.

The Investment Association – the UK trade body that represents the UK asset management industry – has called on regulators to approve blockchain-traded funds.

Pierri, who took over as CEO of BNP Paribas AM in July 2021, said the asset manager was also investing more in using digital technology to improve distribution and increase efficiency across the board. company.

According to Pierri, between 60% and 70% of the reviews on his fund listings are produced using a combination of natural language processing and machine learning.

“It’s potentially transformative for the business,” he said.

To contact the author of this story with comments or news, email David Ricketts


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