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Franklin Templeton Says Its Money-Market Fund Is Attracting Crypto Assets

Total assets in the Franklin OnChain US Government Money Fund (FOBXX), which was launched last year, have increased to around $270 million.

(Bloomberg) -- Franklin Templeton says its money-market fund that records share ownership on a blockchain is seeing inflows from crypto-related entities in the aftermath of the shuttering of several industry-friendly banks. 

Total assets in the Franklin OnChain US Government Money Fund (FOBXX), which was launched in 2021 and became publicly available last year, have increased to around $270 million. The fund uses the Stellar blockchain network to process transactions and record ownership. The fund invests in US government securities, cash and repurchase agreements and doesn’t hold any cryptocurrencies. 

One of the crypto projects that has put money into the fund is the Stellar Development Foundation, a nonprofit organization supporting the Stellar blockchain. The foundation invested $20 million recently.

“Our money was just sitting in the bank accounts and that was not the best place for the value to sit,” Denelle Dixon, chief executive officer of the Stellar Development Foundation, said in an interview, adding that the organization still holds accounts with banks including failed Silicon Valley Bank.

The asset manager has seen an “elevated” level of conversations with a variety of crypto-related participants, including decentralized autonomous organizations, foundations and projects, according to Roger Bayston, head of digital assets at Franklin Templeton.

The fund even has a digital token called BENJI that represents shares of the funds. One share of the fund is maintained at one dollar. The tokens are currently not transferable between fund investors, but executives at the asset manager said that bringing utility to the token is on the roadmap of the firm.

“Money market funds are used for collateral purposes and for payment purposes off-chain,” said Sandy Kaul, senior vice president at Franklin Templeton. “We will fully anticipate those type of use cases moving on-chain as the regulations become more clear.”

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