Fund tokenisation: the push from Europe’s big players could rewrite wealth management

Tokenisation of funds and share classes, tokenised MMFs as collateral and new responsibilities for intermediaries and depositary banks within the European regulatory perimeter.

by Giuseppe Anfuso

Global asset managers such as Amundi, Franklin Templeton and Aviva Investors have launched fund tokenisation and share classes on DLT infrastructures, with the first uses of tokenised money market funds as collateral in institutional programmes already in operation since the beginning of 2026. This shift does not stem from a single law, but from the alignment between existing regulation (UCITS, AIFMD, MiFID II, MMF rules) and new openings by central banks to the use of tokenised assets as collateral, as shown by recent statements from the Bank of England and interventions on the issue by the ECB. This directly involves savers, companies using credit lines secured by funds, depositary banks, asset management companies and intermediaries providing investment services. The immediate repercussions concern the operational transformation of asset management, collateral management and the intermediary’s responsibility for investment services in a context of dematerialised units circulating on blockchain. For wealth management, the key question is whether fund tokenisation is merely a back-office efficiency gain or a genuine “new infrastructure” for European private savings.

From traditional funds to fund tokenisation
Over the past two years, fund tokenisation has moved from a laboratory experiment to a distribution model that reaches the core of the fund industry. Amundi has launched its first tokenised mutual fund and a tokenised share class of the Amundi Funds Cash EUR money market fund, issued on a DLT platform with the support of CACEIS as depositary bank and asset servicing provider. In parallel, Franklin Templeton, through the Benji platform, has developed a range of tokenised money market funds, now also used as collateral in a crypto-institutional setting, while Aviva Investors has formally announced its goal of tokenising products on the XRP ledger in collaboration with Ripple.

From a regulatory standpoint, the new development sits on top of existing rules: funds remain subject to UCITS and AIFMD rules, to product governance requirements and MiFID II developments on product intervention, as well as to the specific rules on money market funds introduced at European level after the financial crisis. DLT is used as the technological infrastructure for representing units, but it does not affect the legal nature of the OICR or the prudential supervisory regime applicable to managers and depositaries. Continuity of the rules is a decisive point: investor protection remains formally anchored to traditional safeguards (prospectus, KID, conflict of interest checks), but the way ownership, transfers and rights attached to units are recorded and made enforceable changes.

Tokenised share classes and MMFs used as collateral
Fund tokenisation in practical terms means the creation of tokenised share classes, that is, unit classes represented on blockchain which coexist with the traditional share classes of the same fund. This makes it possible to capture the operational advantages of DLT (near-instant settlement, greater traceability, potential reduction in operational errors) while keeping offer documents, the risk-return profile and distribution policies unchanged. For intermediaries providing investment services, however, the presence of units “on chain” requires an adaptation of recording systems and an update of transparency obligations, starting with technological and operational information provided to retail clients.

The other front concerns the use of tokenised MMFs as collateral. The Franklin Templeton-Binance case shows how regulated money market fund units can be tokenised and then used, through a specialised custody layer, as off-exchange collateral for transactions on a major digital trading platform. At this point, the responsibility of the intermediary providing investment services changes shape: counterparty risk is no longer concentrated only on the exchange, but across the entire custody chain, from providers of institutional wallets to DLT infrastructures, with a direct impact on the investor protection regime and on best execution obligations.

What changes for asset management and wealth management
For European managers, fund tokenisation is above all a lever for efficiency and for broadening the distribution base, with the possibility of reaching younger, digital-native investors, as some British supervisory authorities also recognise in opening the door to tokenised funds to attract new clients. For wealth management structures, the impact is deeper: tokenisation of share classes makes it possible to imagine unit fractionation models, almost “h24” access to trade settlement and integration with decentralised finance platforms, while still remaining within the scope of MiFID licences. In this scenario, the responsibility of the intermediary providing investment services increasingly shifts to technological oversight (cybersecurity, DORA-style operational resilience) and the ability to explain to the client, in a clear manner, how fund tokenisation works and the related risks.

The bank-client relationship is also set to evolve: the retail investor could hold tokenised money market fund units in their portfolio and use them as collateral for margin lines, lombard lending or advanced trading services, with repercussions for the assessment of creditworthiness and for the risk-return profile of the entire securities account. In this perspective, the issue of investor protection becomes central, because the greater apparent liquidity associated with tokenisation does not eliminate the risk of liquidity runs or price mismatches in market stress situations.

Taxation, compliance burdens and interpretative issues
On the tax side, fund tokenisation does not, in principle, change the capital gains regime applicable to UCITS or alternative fund units: the benchmark remains the gain upon disposal, with the usual withholding taxes or investor declarations, depending on the national jurisdiction. However, the continuous circulation of tokens representing units and the use of tokenised MMFs as collateral raise practical questions: the moment when the gain is realised, the classification of income from staking or leading of fund tokens, the interaction with special “dividend taxation” regimes potentially introduced to bridge digital assets and traditional financial instruments.

Looking ahead, it is not excluded that the growing responsibility of the intermediary providing investment services will prompt the legislator to introduce a specific rule on the tax classification of fund tokens, in line with the rules for dematerialised financial instruments.

Compliance burdens are increasing: asset management companies must integrate the specific operational risks of DLT into internal policies, update risk management models and ensure that second-level controls cover not only compliance with UCITS/AIFMD, but also the security of the technological infrastructures used. Several interpretative issues remain open: who bears the burden of proof in the event of a dispute over ownership of a unit recorded on blockchain; how proof of ownership “on chain” is coordinated with the records kept by depositary banks; what responsibilities rest on validator nodes when they operate in a permissioned ecosystem controlled by supervised intermediaries.

Next steps: between financial stability and competition
Bringing fund tokenisation into the systematic framework of European supervision calls to mind the principles of financial stability, equal treatment of savers and the technological neutrality of the rules. The use of tokenised MMFs as collateral can ease some rigidities in the system, facilitating intraday liquidity management and margin coverage, but it risks amplifying pro-cyclical dynamics in the event of rate shocks or a loss of confidence in money market funds. In this context, investor protection requires a careful balance between innovation and macroprudential safeguards, also in light of recent reflections by European central banks on the use of tokenised assets as collateral in payment systems and refinancing operations.

For large European managers, pushing fund tokenisation means seeking a competitive advantage in the global race for tokenised assets, but it also carries a system-wide responsibility: setting market standards for DLT governance, interoperability and operational incident management, in line with the MiFID II changes and with the principles governing the capital gains regime applicable to new financial instruments. For wealth management, the challenge will be to integrate these solutions into an offering that remains understandable to clients, to safeguard the responsibility of the intermediary providing investment services and to turn technology into a real improvement in the risk-return profile, rather than merely a digital marketing lever. If this transition is managed in continuity with the principles of investor protection, fund tokenisation could become a stable component of the new European financial infrastructure, rather than yet another technology fad.