Franklin Templeton’s OnChain fund now enables direct investors to access blockchain transactions

Franklin Templeton is now opening the door for new possibilities with its decision to enable peer-to-peer fund transfers for the Franklin OnChain U.S. Government Money Fund (FOBXX), the first time that the United States-registered mutual funds are operating using blockchain technology. This element grants shareholders the possibility to carry out the transfer of shares; these are BENJI digital tokens without intermediary agencies on a public blockchain.

Franklin Templeton launches blockchain-enabled mutual fund

In 2021, Franklin Templeton came up with the Franklin OnChain U.S. Government Money Fund as the first mutual fund launched in the world to not just explore the blockchain but also utilize it. Via Benji tokens that serve as the reported shares of the fund, its transfer agent measures shareholder ownership. 

The transfer agent uses a proprietary system interfaced with blockchain to keep track of share ownership. This infrastructure stabilizes the secure and trusted performance of the blockchain during the course of transactions.

Roger Bayston, Chair of Digital Assets at Franklin Templeton, expressed great optimism about the improvement that the feature would achieve, saying, We are optimistic that the BENJI sharing platform will now work adequately for token holders to transfer savings and make it seamless to transfer shares”.

The fund, worth over $360 million in assets as of March 31st, 2024, mainly invests in government holdings, cash, and fully collateralized repurchase transactions. Fundamentally, the goal is to generate a decent return from income while sustaining the shareholders’ interests by keeping a stable price pegged to USD at $1.00.

Franklin Templeton technology for global investment management

Besides, the peer-to-peer transfer ability enhances the liquidity of BENJI coins. It brings together digital finance-based assets with classical financial texts that are already available in blockchain technology. 

A feature that individual investors find very convenient is that they can manage their accounts through the Benji Investment mobile application, available on Android and iOS platforms. As for institutional clients, they have separate web portals that are even more flexible and efficient for their needs.

Technology has become an integral part of investment management, and Franklin Templeton’s capability to unite industry know-how with technological advances is what makes it stand out among its peers, who serve not only local but also global clients. The company has experienced more than 75 years in the industry and now has over $1.6 trillion worth of assets under its management. The company keeps adopting to stay updated on the market situation and client needs.

Risks and opportunities of blockchain in Franklin Templeton’s mutual funds

Even though blockchain technology in mutual funds is essential, it cannot but introduce some specific risks. These range from changing regulatory rules to safety concerns and the necessity for managing the affected business’ operation in response to the shifting technological and environmental landscape. In addition, the fund does not invest in debt with the actual 100% guarantee of the United States government even though it invests in the United States government debt.

Partially adopting blockchain, Templeton is only a narrow path toward the passage of tokenization in finance. There is an increasing tendency to involve the cryptocurrency world in changing and improving investors’ conditions. Thus, Franklin Templeton has exceeded the usual, which positions them well for other financial investors looking forward to having blockchain technology’s potential incorporated into financial systems.