Franklin Templeton has officially launched its tokenized U.S. Treasury fund — the Franklin OnChain U.S. Government Money Fund — in Luxembourg, marking a pivotal step in bridging traditional finance with blockchain innovation. This move expands access to U.S. government bonds for institutional investors across Europe, reinforcing the growing momentum behind tokenized real-world assets (RWAs).
After receiving regulatory approval from Luxembourg’s financial watchdog, the Commission de Surveillance du Secteur Financier (CSSF), in October 2024, the fund is now available to institutional clients from eight European countries, including France, Germany, Austria, Italy, Spain, Switzerland, the Netherlands, and Belgium.
What Sets the Franklin OnChain Fund Apart?
The Franklin OnChain U.S. Government Money Fund represents a groundbreaking fusion of conventional finance and decentralized technology. Originally launched in 2021, this fund primarily invests in short-term U.S. Treasury securities and leverages blockchain infrastructure to streamline share issuance, ownership tracking, and transfers.
Each share of the fund is represented by a digital token called BENJI, built on the Stellar blockchain. One BENJI token equals one share of the fund, pegged to a stable value of $1.00. The goal is to maintain capital preservation while delivering competitive yields and high liquidity — key attributes sought by conservative institutional investors.
As of March 31, 2024, the fund managed over $360 million in assets, demonstrating strong market confidence and adoption. A significant milestone came in April 2024 when Franklin Templeton announced peer-to-peer transferability of BENJI tokens, allowing holders to send tokens directly to other approved digital wallets without intermediaries.
“We’re excited to announce peer-to-peer transferability for the yield-bearing BENJI security token! This new feature will provide users the ability to send BENJI tokens to other BENJI holder’s digital wallets.”
— Franklin Templeton Digital Assets (@FTDA_US), April 25, 2024
This functionality enhances operational efficiency, reduces settlement times, and increases transparency — all critical advantages in modern asset management.
The Technology Behind the Fund
The Franklin OnChain Fund operates using a carefully designed tech stack that includes:
- Stellar Blockchain: Known for fast, low-cost transactions and strong compliance features, Stellar provides the foundation for token issuance and transfers.
- BENJI Token: A regulated security token representing fractional ownership in the underlying U.S. Treasury portfolio.
- Blockchain-Enabled Transfer Agency: Automates investor onboarding, Know Your Customer (KYC) checks, and ownership updates through smart contracts and verified digital identities.
This structure not only reduces administrative overhead but also ensures real-time auditability and tamper-resistant recordkeeping — a major leap forward compared to legacy systems reliant on paper trails and manual reconciliation.
Why Luxembourg?
Luxembourg has long been a hub for investment funds in Europe, home to more than 4,000 Undertakings for Collective Investment in Transferable Securities (UCITS) and Alternative Investment Funds (AIFs). Its well-established regulatory framework, investor protection standards, and deep financial infrastructure make it an ideal launchpad for innovative financial products.
By securing CSSF approval, Franklin Templeton has validated the compliance and legitimacy of its blockchain-based model within one of Europe’s most respected financial jurisdictions. This opens doors for broader distribution across the EU under cross-border marketing regimes like UCITS passporting.
The Growing Demand for Tokenized U.S. Treasuries
Tokenized U.S. Treasuries have emerged as one of the fastest-growing segments in digital finance. At the start of 2023, the market was valued at approximately $1.2 billion, with institutional demand driving much of the growth. These assets offer a rare combination: the safety of U.S. government debt and the efficiency of blockchain-based settlement.
Franklin Templeton is currently the market leader, accounting for 38.6% of all tokenized U.S. Treasury assets — over $332 million — through its OnChain fund. Other major players like BlackRock and Securitize have also entered the space, signaling a structural shift in how fixed-income markets may operate in the future.
Key Benefits Driving Adoption:
- 24/7 Settlement: Unlike traditional markets with fixed trading hours, blockchain enables near-instantaneous transactions around the clock.
- Lower Costs: Automation reduces intermediary fees and operational complexity.
- Greater Liquidity: Fractional ownership allows smaller institutions and qualified investors to participate.
- Transparency: Real-time on-chain tracking improves trust and auditability.
As more asset managers tokenize sovereign debt, experts predict this sector could surpass $10 billion within the next few years.
Core Keywords and Market Positioning
The rise of tokenized government bonds reflects broader trends in financial digitization. Key core keywords that define this space include:
- Tokenized U.S. Treasuries
- Blockchain investment funds
- Franklin OnChain Fund
- BENJI token
- Real-world asset tokenization (RWA)
- Institutional crypto adoption
- Luxembourg fintech innovation
- Stellar blockchain use cases
These terms naturally align with high-intent search queries from institutional investors, fintech professionals, and blockchain developers seeking reliable entry points into regulated digital asset markets.
Frequently Asked Questions (FAQ)
Q: What is the Franklin OnChain U.S. Government Money Fund?
A: It’s a regulated investment fund by Franklin Templeton that invests in U.S. Treasury securities and issues blockchain-based tokens (BENJI) representing shares. It combines traditional fixed income with modern digital infrastructure.
Q: Who can invest in this fund?
A: Currently available to institutional investors in eight European countries following CSSF approval. Eligibility includes banks, asset managers, pension funds, and family offices meeting regulatory requirements.
Q: Is the BENJI token tradable on public exchanges?
A: No. BENJI is a private security token issued on the Stellar network and transferable only between verified institutional wallets. It is not listed on retail crypto exchanges.
Q: How does blockchain improve this fund’s operations?
A: Blockchain enables faster settlements, lower costs, enhanced transparency, automated compliance, and peer-to-peer transfers — all while maintaining strict regulatory oversight.
Q: What is the role of the Stellar network?
A: Stellar provides a scalable, low-cost, and compliant public ledger for issuing and transferring BENJI tokens. Its built-in support for regulated assets makes it ideal for institutional use.
Q: Are tokenized Treasuries safe?
A: Yes — they are backed by actual U.S. government bonds held in custody. When issued by reputable firms like Franklin Templeton and compliant with regulators like the CSSF, they combine safety with innovation.
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The Future of Asset Tokenization
Franklin Templeton’s expansion into Luxembourg signals more than just a product launch — it’s a blueprint for how traditional finance can evolve using blockchain. As regulatory clarity improves and infrastructure matures, we can expect more asset classes — from corporate bonds to real estate — to follow suit.
With increasing interest from central banks, custodians, and multinational institutions, real-world asset tokenization is no longer speculative. It’s becoming a core component of modern capital markets.
The Franklin OnChain Fund stands at the forefront of this transformation, proving that innovation and regulation can coexist — paving the way for a more efficient, inclusive, and transparent financial system.