Franklin Templeton, a global investment management giant, has announced that users of its Benji Investments platform can now convert USDC stablecoins into U.S. dollars to invest in the Franklin Onchain U.S. Government Money Fund (FOBXX), with shares represented by BENJI tokens. This move marks a significant step in integrating traditional finance with digital assets.
Zero Hash Powers USDC-to-Fiat Conversion
According to the announcement, the conversion service is provided by Zero Hash, which supports over 60 digital assets across multiple blockchains. Users can convert USDC to fiat USD to purchase BENJI tokens seamlessly, and conversely redeem fund proceeds back into USDC. USDC is the second-largest stablecoin by market capitalization, making this feature highly accessible for institutional investors.
First U.S. Registered Mutual Fund on Blockchain
Launched in 2021, the Franklin Onchain U.S. Government Money Fund was the first U.S.-registered mutual fund to use a public blockchain for transaction processing and share ownership recording. The fund primarily invests in government securities, cash, and fully collateralized repurchase agreements, maintaining a stable $1 net asset value per share while offering competitive yields. In April 2024, the fund already enabled peer-to-peer transfers for institutional BENJI holders, further expanding its blockchain capabilities.
Competition with BlackRock's BUIDL
This development puts Franklin Templeton in direct competition with BlackRock, which launched its own tokenized U.S. Treasury fund called BUIDL in March 2024, in collaboration with Coinbase and Securitize. Both asset managers are racing to capture institutional demand for tokenized money market funds, a rapidly growing segment within the real-world asset (RWA) tokenization space.
Executive Commentary: Seamless Access with Yield
Roger Bayston, Head of Digital Assets at Franklin Templeton, commented: "By offering an on-ramp to buy BENJI tokens with USDC, we provide a seamless method for investors to access our tokenized money market fund – a registered fund that delivers the price stability of a stablecoin while also accruing yield." He emphasized that the fund is designed to combine the best of both traditional finance and decentralized finance (DeFi).
Currently, the USDC conversion feature is available only to institutional investors, but Franklin Templeton hinted at potential future expansions to individual investors. Industry observers note that this integration simplifies the investment process for crypto-native funds and treasury managers who hold USDC and seek regulated yield products.
Broader Implications for RWA Tokenization
The ability to easily convert between stablecoins and the fund's fiat equivalent reduces friction for institutional adoption. As more asset managers follow suit, the tokenized money market fund sector could see exponential growth, further blurring the lines between traditional capital markets and blockchain-based finance. Franklin Templeton's move reinforces the trend of major financial institutions leveraging public blockchains to increase operational efficiency and investor access.