Global investment management giant Franklin Templeton has announced a significant expansion of its digital asset capabilities. Users of the firm's Benji Investments platform can now convert USDC, the second-largest stablecoin by market capitalization, directly into U.S. dollars to fund investments in the Franklin Onchain U.S. Government Money Fund. This move represents a milestone in bridging the gap between traditional finance (TradFi) and the cryptocurrency ecosystem.
How USDC Conversion Works: Technology and Infrastructure
The conversion service is powered by Zero Hash, a digital asset infrastructure provider that supports over 60 cryptocurrencies across multiple blockchains. Once USDC is converted to fiat USD, the funds can be used to purchase shares of the tokenized money market fund, represented by BENJI tokens. Franklin Templeton emphasized that this new feature streamlines the entire process, allowing institutional wallets to seamlessly move from stablecoin holdings to a regulated, yield-bearing fund.
“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, which is a registered fund that provides the price stability characteristics of a stablecoin while also accruing yield,” said Roger Bayston, Head of Digital Assets at Franklin Templeton.
A Pioneer in Tokenized Funds: The Franklin Onchain U.S. Government Money Fund
Launched in 2021, the Franklin Onchain U.S. Government Money Fund was the first U.S.-registered mutual fund to utilize a public blockchain for transaction processing and share ownership recording. The fund primarily invests in U.S. government securities, cash, and fully collateralized repurchase agreements, maintaining a stable net asset value of $1 per share. This structure offers investors capital preservation and daily liquidity while generating competitive yields—a combination that has attracted both crypto-native and traditional institutional capital.
In April 2024, the fund had already enabled peer-to-peer transfers for institutional BENJI token holders directly on the blockchain, further demonstrating Franklin Templeton’s commitment to integrating digital assets into mainstream fund administration. The newly announced USDC conversion feature complements this by addressing the front-end challenge of fiat on-ramping, making it easier for investors already holding stablecoins to enter the fund without going through traditional banking rails.
Competitive Landscape: BlackRock’s BUIDL and the Rise of Tokenized Treasuries
Franklin Templeton is not the only traditional asset manager exploring tokenized money market funds. In March 2024, BlackRock launched the BlackRock USD Institutional Digital Liquidity (BUIDL) fund in partnership with Coinbase and tokenization platform Securitize. Both funds target institutional demand for tokenized government securities, but Franklin Templeton enjoys a first-mover advantage in the U.S. registered fund space and has already implemented both peer-to-peer transfers and stablecoin conversion.
Industry experts view this trend as part of a broader wave of “real-world asset” (RWA) tokenization, where traditional financial instruments are issued and traded on blockchain networks. The total value locked in tokenized U.S. Treasury products has grown substantially in 2024, reflecting strong appetite from crypto-native treasury managers and traditional institutions seeking on-chain yield.
Future Plans and Broader Implications
While the USDC conversion feature is currently available only to institutional investors and qualified clients, Franklin Templeton has hinted at future expansion to individual investors on the Benji platform. If realized, this could democratize access to tokenized money market funds, allowing retail participants to earn regulated yields without needing a traditional brokerage account.
For the broader crypto ecosystem, the integration of USDC into a regulated fund framework sends a powerful signal: stablecoins are evolving from mere trading instruments into viable payment and investment tools within traditional finance. As more asset managers replicate this model, the line between DeFi and TradFi will continue to blur, creating new opportunities for capital efficiency and financial inclusion.
The Franklin Onchain U.S. Government Money Fund currently holds hundreds of millions of dollars in assets under management, and the addition of USDC conversion is expected to further accelerate inflows. With BlackRock and Franklin Templeton leading the charge, the tokenized fund sector appears poised for exponential growth in the coming years.