Franklin Templeton has officially launched its tokenized U.S. Treasury fund, the Franklin OnChain U.S. Government Money Fund, in Luxembourg. This is the latest achievement towards providing European institutional investors access to U.S. government bonds.
This is the first-of-its-kind fund in Luxembourg, using blockchain to enhance transaction efficiency and security. After regulatory approval last October, institutional investors from eight European countries, including France, Germany, and Austria, can now access the fund.
What Makes the Franklin OnChain Fund Unique?
The Franklin OnChain U.S. Government Money Fund is an investment solution that blends traditional finance with blockchain technology. Launched in 2021, the fund heavily invests in U.S. government bonds and utilizes blockchain for transactions and share recording.
Each BENJI token is equivalent to one fund share on the Stellar platform. The fund aims for the $1.00 share price to remain fixed while providing high current yield, capital preservation, and liquidity. As of March 31, 2024, the fund has over $360 million under its management.
This launch follows the regulatory approval by Luxembourg’s financial regulator, the Commission de Surveillance du Secteur Financier (CSSF), in October 2024.
The fund uses the Stellar blockchain platform, Franklin Templeton’s proprietary BENJI token, and a blockchain-enabled transfer agency. This structure enhances operating efficiency and transparency for the players engaged in the authorized jurisdictions.
Rise of Tokenized U.S. Treasuries
Tokenized U.S. Treasuries is one market expanding rapidly, reaching $1.2 billion by the start of 2023, driven by the increased adoption by institutional investors. Franklin Templeton alone accounts for 38.6% of the market, issuing $332 million worth of its OnChain U.S.
Government Money Fund. This rapid increase indicates the potential for the transformation of traditional asset management.
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