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

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

The move allows Franklin OnChain US Treasury Fund ( FOBXX ) investors to transfer the fund's BENJI token among themselves without any intermediary. Available on the Stellar (XLM) and Polygon (MATIC) blockchains, the BENJI token represents shares of a fund that holds government securities, cash and repurchase agreements and pays a stable return to token holders.

“Allowing the transfer of fund shares peer-to-peer puts Franklin Templeton at the forefront of the financial sector, where tokenized real assets are an industry staple and are more open, transparent and accessible,” Jason Chlipala, the company's chief business officer, the Fund said in an email Stellar development.

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

“Ultimately, we hope that assets built on blockchain […] will 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 US Treasuries are at the forefront of the race to bring traditional financial assets such as bonds onto the blockchain, also known as real asset tokenization . The market for tokenized Treasury bonds has grown to $1.2 billion, increasing tenfold since the start of 2023, as digital asset investors seek secure returns for their blockchain-based cash.

BENJI, launched in 2021, is the largest and oldest of them with a market capitalization of $380 million, data from shows . Newcomers such as ONDO Finance tokens and BlackRock's new BUIDL fund with Securitize, which already allow peer-to-peer token transfers, have taken significant market share and are moving closer to Franklin Templeton's proposal.