Franklin Templeton Upgrades $380M Tokenized Treasury Fund to Enable Peer-to-Peer Transfers

Asset manager Franklin Templeton said Thursday that it has enabled peer-to-peer token transfers for its $380 million tokenized money market fund, a key step to make the offering more interconnected to the broader digital asset economy similar to rivals.

The move allows investors of the Franklin OnChain U.S. Government Money Fund (FOBXX) to transfer the fund’s BENJI token between each other without any intermediary. The BENJI token, available on the Stellar (XLM) and Polygon (MATIC) blockchains, represents shares in the fund that holds government securities, cash and repurchase agreements and pays out a steady yield to token holders.

“Allowing fund shares to be transferred peer-to-peer puts Franklin Templeton on the cutting edge of the financial sector where tokenized real-world assets are an industry staple and more open, transparent, and accessible,” Jason Chlipala, chief business officer of Stellar Development Foundation, said in an email.

The development is important because transferability allows to expand the token’s utility in the future such as trading on secondary markets or using it as collateral for loans in the decentralized finance (DeFi) platforms.

“Eventually, we hope for assets built on blockchain rails […] to work seamlessly with the rest of the digital asset ecosystem,” Roger Bayston, head of digital assets at Franklin Templeton, said in a press release.

Tokenized U.S. Treasuries are at the forefront of the race to bring traditional financial assets such as bonds to blockchain rails – also known as tokenization of real-world assets. The market for tokenized Treasuries have mushroomed to $1.2 billion, growing tenfold since early 2023, as digital asset investors have been seeking safe yields for their blockchain-based cash holdings.

BENJI, launched in 2021, is the largest and oldest of them with a $380 million market capitalization, rwa.xyz data shows. Newcomers like Ondo Finance’s tokens and BlackRock’s new BUIDL fund with Securitize, which have already allowed peer-to-peer token transfers, carved out a significant market share and are closing in on Franklin Templeton’s offering.