Pilots Were Too Easy: What Live Tokenisation Deals Taught BNP Paribas

Quick Summary

Live tokenisation work, including projects with Allfunds Blockchain and tokenised money market funds on public Ethereum, taught BNP Paribas lessons no proof of concept could. Wayne Hughes, Digital Assets Market & Client Engagement Lead, Securities Services, says pilots were in some ways too easy, and it was only live deals that got the whole organisation engaged, right down to lawyers asking what a blockchain is.

What live tokenisation work has BNP Paribas done?

Hughes points to a busy period of real activity rather than lab exercises. The bank has done a significant amount of work with Allfunds Blockchain, and more recently with tokenised money market funds on public Ethereum. He describes both as very valuable initiatives, and above all as learning tools. The distinction he draws is between testing whether something can work and discovering what it takes for a global bank to actually run it. Live work, with real clients and real contracts, is what forces the second question to be answered.

Why were proofs of concept not enough?

Hughes is not dismissive of proofs of concept. They were great for getting the ball rolling and testing the technology. But he argues that, in some ways, they were too easy. By their nature their scope was very limited, and that meant they never gave the team the opportunity to get the full organisation engaged. A contained pilot can succeed without every function of the bank having to decide how the activity would really be run, documented and controlled.

What changed when the deals went live?

Once BNP Paribas moved into live experimentation, the picture changed. Hughes describes three shifts:

• All of the different areas of the bank became engaged
• Those teams started to see what tokenisation could mean for them going forward
• They also developed some healthy concerns, which then had to be worked through

His clearest example is contractual. The first time the team signed a contract with a client for a live experiment, even a very simple one, the process took quite a few months. The first question he received from the lawyers, he recalls, was what a blockchain is and what it means for them from a legal perspective. Live experiments, he says, are what allowed the bank to get the full organisation up to speed and comfortable with the technology.

FF NEWS TAKE:

The story of a simple contract taking months because the first legal question was what a blockchain is will be familiar to anyone who has tried to take an innovation out of the lab. It is also the best argument for live deals over endless pilots. Technology can be proven in a sandbox. Institutional readiness cannot, and that is where the real work of tokenisation now sits.