BBVA to Experiment With First Blockchain Tokenized Fund
Tradfi institutions are now open to testing decentralized technologies and applying them to existing use cases to examine their possible benefits. Banco Bilbao Vizcaya Argentaria (BBVA), the second-largest Spanish bank, has announced that it will launch a tokenized fund as part of the regulatory sandbox enacted by the CNMV, the Spanish securities regulator.
This sandbox allows participants to innovate and try new technologies, supported by the regulator’s supervision. Each project must be presented and pass the evaluations and requirements established by the CNMV.
The BBVA Token Short-Term Fixed Income fund will register its operations in a private blockchain provided by Allfunds, a software developer that produces decentralized solutions for third parties. BBVA Asset Management will act as the fund manager and marketer, using Allfund’s network, smart contracts, and nodes exclusively created for this test case.
Nonetheless, the fund will be operated by investors as if it were a traditional fund, who will be abstracted from the complexities of its decentralized operation. This means anyone with experience managing these financial tools can also operate this fund.
The bank reported that, due to its experimental nature, only bank employees would participate in this fund, allowing the institution to evaluate the performance of this blockchain-based instrument without risks for regular customers. BBVA stressed this was the result of a joint effort between its Asset Management division and other teams of the BBVA group, including those dedicated to digital assets and blockchain tech.
Reinforcing the relevance of this step for the institution, BBVA Asset Management Europa CEO Belen Blanco stated:
The project marks an important step towards adopting a technology with broad transformative potential in asset management, starting in a controlled and regulated environment that will allow BBVA AM to explore its benefits in a secure and scalable manner.
The bank recently reported it will launch a Euro-pegged stablecoin next year in partnership with Visa.
