Franklin Templeton Unveils Tokenized Fund in Hong Kong

• Franklin Templeton introduced Hong Kong’s first blockchain-issued tokenized USD fund.
• The fund targets institutional investors holding assets worth at least HK$8 million.
• It aligns with Hong Kong’s Fintech 2030 plan to advance tokenized asset adoption.

Franklin Templeton has launched a tokenized U.S. dollar money market fund in Hong Kong, a step in the city’s fintech expansion. The Franklin OnChain U.S. Government Money Fund offers professional and institutional investors blockchain-based access to U.S. government securities under Hong Kong’s Fintech 2030 plan.

Tokenized Fund Targets Institutional Investors

According to Franklin Templeton, the fund is Luxembourg-registered under the Undertakings for Collective Investment in Transferable Securities (UCITS) framework, enabling cross-border sales within the European Union. It serves as Hong Kong’s first tokenized UCITS money market fund issued natively on blockchain. Institutional and professional investors with at least HK$8 million (US$1 million) in assets can access it.

The fund integrates issuance, distribution, and servicing directly on blockchain, using Franklin Templeton’s proprietary recordkeeping system. It aims to provide income and preserve capital through investments in short-term U.S. Treasuries. The firm stated that blockchain integration enhances transparency and operational efficiency.

Tariq Ahmad, Franklin Templeton’s head of Asia-Pacific, said the company plans to seek approval from Hong Kong’s Securities and Futures Commission (SFC) for a retail tokenized fund. He added that expanding access to tokenized products forms part of a broader effort to build a regulated digital assets ecosystem in the region.

Part of Hong Kong’s Fintech 2030 Initiative

The launch coincides with Hong Kong’s Fintech 2030 strategy, announced earlier this week by Hong Kong Monetary Authority (HKMA) chief executive Eddie Yue Wai-man. The five-year plan outlines over 40 initiatives focused on artificial intelligence, asset tokenization, and digital currency integration to support Hong Kong’s position as a fintech hub.

Under the plan, the HKMA envisions banks using tokenized deposits to settle tokenized money market funds and deploying central bank digital currencies for interbank settlements. Franklin Templeton’s move aligns with this vision, introducing blockchain-based investment products within a regulated framework.

Franklin Templeton has been collaborating with HSBC and OSL Group through HKMA’s Project Ensemble since 2024. The project explores how tokenized deposits can streamline settlement for digital assets. Using its “gBENJI” onchain fund token, Franklin Templeton demonstrated how tokenized deposits could facilitate real-time yield distribution and fund flows.

Related: Franklin Templeton Expands Benji Platform to BNB Chain

Industry Partnerships Strengthen Adoption

Brian Chen, head of OSL Wealth Management, said Hong Kong’s evolving regulations are helping the city gain trust among institutional investors. OSL acts as a licensed distribution partner supporting Franklin Templeton’s tokenized fund. 

Chen noted that tokenized structures improve transaction speed and settlement efficiency for wealth clients. HSBC has also been active in this ecosystem. Lewis Sun, global head of domestic and emerging payments at HSBC, said the collaboration highlights the potential of tokenized deposits to enable near-instant settlement for tokenized money market funds. 

HSBC’s involvement signals continued engagement by traditional financial institutions in blockchain-based finance. Franklin Templeton’s blockchain journey began in 2018, when the firm started developing digital asset infrastructure and investment strategies. 

In 2021, it launched the world’s first U.S.-registered mutual fund that used blockchain-integrated technology to record share ownership. The firm followed this by introducing a fully tokenized UCITS fund in Luxembourg in 2024 and a retail tokenized fund in Singapore earlier this year.

Franklin Templeton uses its Benji Technology Platform to run these projects. This system connects with blockchain to help trade, manage, and oversee tokenized investments. It’s designed for banks and asset managers that want to turn traditional securities into digital tokens or offer blockchain-based investment products.

By taking part in Project Ensemble and working with the Hong Kong Monetary Authority’s tokenization plans, Franklin Templeton shows how ready Hong Kong is to blend traditional finance with blockchain systems. Through safe testing and partnerships, the city is steadily moving toward a connected and fully digital financial ecosystem.

Meanwhile, Franklin Templeton’s latest move shows Hong Kong’s progress in developing a compliant and connected environment for blockchain-based fund offerings. The collaboration among global financial institutions, regulators, and fintech providers continues to define how digital assets grow in Hong Kong.