In a significant milestone for the convergence of traditional finance and blockchain innovation, Franklin Templeton’s tokenized money market fund has crossed $270 million in assets under management (AUM) just over a year after launch. The Franklin OnChain U.S. Government Money Fund (FOBXX) marks a pivotal advancement in the evolution of digital asset products, representing the first U.S.-registered fund to leverage a public blockchain—specifically Stellar—to record transactions and share ownership.
This achievement underscores growing institutional confidence in blockchain-based financial infrastructure and signals a broader shift toward tokenized asset management. As legacy financial institutions explore new avenues for efficiency, transparency, and investor accessibility, Franklin Templeton’s success offers a compelling blueprint for the future of investment vehicles.
A New Era in Asset Management
Franklin Templeton, a global asset management powerhouse overseeing $1.4 trillion in AUM, has long been at the forefront of financial innovation. With the launch of its on-chain government money fund, the firm is bridging traditional fixed-income strategies with cutting-edge blockchain technology.
The fund primarily invests in debt issued by Federal Home Loan Banks, offering investors exposure to high-quality, short-term U.S. government-backed securities. What sets it apart is its fully tokenized structure: each share is represented as a digital token on the Stellar blockchain, enabling near real-time settlement, enhanced auditability, and reduced counterparty risk.
Roger Bayston, Head of Digital Assets at Franklin Templeton, emphasized the transformative potential of blockchain in finance:
“We believe that blockchain technologies have the potential to reshape the investment management industry by providing greater transparency and lower operational costs for traditional financial products. Blockchains like Stellar’s are important to the investment process of the future, and assets built on blockchain rails, like the Franklin OnChain U.S. Government Money Fund, will eventually be interoperable with the rest of the digital asset ecosystem.”
Benji App: Bridging Institutional Finance and Digital Access
To streamline access to its tokenized offerings, a subsidiary of Franklin Templeton launched Benji, a mobile application designed to simplify investment in digital securities and cryptocurrencies. Through Benji, users can directly purchase and manage shares in the OnChain fund, with each share represented by a corresponding Benji token.
This user-centric approach lowers entry barriers for retail investors while maintaining institutional-grade compliance and security. By combining intuitive design with blockchain-backed transparency, Benji exemplifies how traditional finance can evolve to meet digital-native expectations.
Why Tokenized Funds Are Gaining Traction
The rise of tokenized funds like FOBXX reflects broader market dynamics:
- Demand for yield: With stablecoins offering minimal returns and inflation eroding purchasing power, investors are seeking alternative yield-generating instruments.
- Institutional demand for security: Protocols and treasuries managing large capital pools require trusted custodians. High-profile managers like Franklin Templeton offer credibility and regulatory oversight.
- Operational efficiency: Blockchain enables faster settlements, 24/7 trading potential, and automated compliance through smart contracts.
Stellar Development Foundation itself has allocated part of its treasury to the Franklin OnChain fund—a strong endorsement from a major blockchain ecosystem. This strategic move highlights how blockchain-native organizations are increasingly turning to regulated, yield-bearing instruments rather than relying solely on volatile crypto holdings or low-return stablecoins.
The Broader Trend: Asset Managers Embrace Tokenization
Franklin Templeton is not alone in exploring the potential of tokenization. A growing number of asset managers are either investing in or launching tokenized financial products:
- KKR: One of its private credit funds was partially tokenized on Avalanche by a third party, allowing fractional ownership and improved liquidity.
- Deutsche Bank: Partnered with blockchain platform Memento to test tokenized fund distribution.
- abrdn: Collaborating with Hedera to develop digital asset solutions.
- Apollo Global Management: Working with Figure to bring private credit funds on-chain.
- Hamilton Lane: Tokenized a private equity fund via Figure’s blockchain infrastructure.
These initiatives reflect a maturing market where even conservative financial institutions recognize the long-term benefits of digitizing assets—from improved transparency to global investor access.
European Momentum in Digital Securities
While much of the U.S. focus has been on money market and Treasury-backed tokenized funds, Europe is advancing rapidly in the digital securities space. Union Investment stands out as one of the most active institutional investors, having participated in multiple landmark issuances:
- Two digital bonds issued by the European Investment Bank (EIB) on public blockchains.
- The Siemens digital bond, a pioneering corporate issuance using distributed ledger technology (DLT).
Such activity demonstrates that regulatory frameworks in Europe are increasingly supportive of innovation in capital markets, paving the way for broader adoption across asset classes.
Core Keywords Driving Industry Transformation
The rapid growth of Franklin Templeton’s tokenized fund is fueled by several key themes shaping today’s financial landscape:
- Tokenized funds
- Blockchain in finance
- Digital asset management
- Stellar blockchain
- On-chain investments
- Money market funds
- Institutional crypto adoption
- Yield-bearing digital assets
These terms represent not just buzzwords but fundamental shifts in how capital is managed, distributed, and accessed globally.
Frequently Asked Questions (FAQ)
Q: What is a tokenized money market fund?
A: A tokenized money market fund represents traditional short-term debt investments (like government securities) where ownership shares are issued as digital tokens on a blockchain. This enables faster settlement, increased transparency, and programmable compliance.
Q: How does Franklin Templeton’s fund use the Stellar blockchain?
A: The Franklin OnChain U.S. Government Money Fund records all transactions and share ownership on the Stellar public blockchain. Each fund share is represented by a Benji token, ensuring real-time auditability and interoperability.
Q: Who can invest in this tokenized fund?
A: Currently, access is primarily available through regulated channels and platforms like the Benji app, targeting both accredited and institutional investors compliant with U.S. securities regulations.
Q: Why are asset managers tokenizing funds?
A: Tokenization reduces operational costs, enables fractional ownership, improves liquidity, and allows for 24/7 settlement. It also opens up global investor participation and enhances transparency.
Q: Are tokenized funds safer than traditional ones?
A: While they carry similar underlying asset risks, tokenized funds benefit from immutable transaction records and reduced settlement risk due to blockchain infrastructure. However, they also introduce new considerations around custody and smart contract security.
Q: Will more traditional funds go on-chain?
A: Yes. With growing proof points from firms like Franklin Templeton, KKR, and Deutsche Bank, industry experts anticipate widespread tokenization of mutual funds, ETFs, and private market vehicles over the next 5–10 years.
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Final Thoughts
Franklin Templeton’s successful scaling of its tokenized money market fund past $270 million AUM is more than a corporate milestone—it’s a bellwether for the future of finance. As inflation pressures persist and digital infrastructure matures, demand for secure, yield-generating, on-chain alternatives will only grow.
With major players across the U.S. and Europe embracing digital securities, we are witnessing the early stages of a systemic transformation: one where ownership is transparent, settlement is instant, and access is democratized—all powered by blockchain technology.
For investors, institutions, and innovators alike, the message is clear: the future of asset management is already unfolding on-chain.