Franklin Templeton Enables USDC Conversions on Benji Investments Platform

Rhea-AI Summary

Franklin Templeton has introduced a new feature on its Benji Investments platform, allowing users to convert USDC stablecoin to U.S. dollars (USD) to fund investments in the Franklin OnChain U.S. Government Money Fund (FOBXX).

This fund is unique as it processes transactions and records ownership on a public blockchain. USDC conversion services are provided by Zero Hash, enabling seamless conversion and investment in BENJI tokens, which represent shares of the fund.

Currently available to institutional wallets, this feature will expand to individual investors in the future. The fund, launched in 2021, aims to offer competitive yields while maintaining a stable $1.00 share price, investing primarily in government securities and cash.

Positive

• Introduction of USDC conversion enhances accessibility for both traditional and blockchain-native investors.
• BENJI tokens represent shares in a U.S.-registered mutual fund, providing price stability and yield.
• Zero Hash supports seamless USDC to USD conversion for easy investment in BENJI tokens.
• The Fund invests 99.5% of its assets in government-backed securities, ensuring security and stability.
• Peer-to-peer transfer capability on the blockchain for institutional BENJI token holders adds flexibility.
• Potential future expansion of USDC services to individual investors increases market reach.

Negative

• Current availability of USDC conversion services is to institutional investors, potentially excluding a large retail investor base.
• Dependence on Zero Hash for USDC conversion introduces a single point of failure risk.

Insights

Financial Analyst

Franklin Templeton's move to enable USDC conversions on the Benji Investments platform is a noteworthy development. It demonstrates a progressive integration of traditional and digital finance, providing a new avenue for investors to access stable, regulated financial products with the use of cryptocurrency. This cross-integration could make investing more accessible and efficient, attracting a new subset of blockchain-native investors.

From a business perspective, this innovation could enhance the liquidity and ease of transactions associated with the Franklin OnChain U.S. Government Money Fund (FOBXX). The backing by USDC, which is a widely recognized stablecoin, could boost investor confidence in the digital asset ecosystem while maintaining stability and yield. This approach could potentially lead to broader adoption and increased assets under management for the fund, positively impacting Franklin Templeton's financial performance.

Long-term, this move might position Franklin Templeton as a pioneer in the blockchain-enabled mutual fund space, potentially paving the way for other traditional financial institutions to follow suit. This strategic advantage could translate into higher market share and competitive differentiation. However, it's important to note that the regulatory landscape for digital assets is still evolving, which could pose both opportunities and risks.

Tech Expert

The integration of USDC conversions on the Benji Investments platform hinges heavily on the underlying technology provided by Zero Hash. This infrastructure supports over 60 digital assets, making it a robust and flexible foundation for seamless currency conversion. The ability to instantly convert USDC to USD and vice versa is important for maintaining liquidity and operational efficiency in digital transactions.

This development highlights the increasing convergence between fintech and traditional finance. The use of blockchain technology to record ownership and process transactions ensures transparency, security and potentially lower transaction costs, which are significant advantages over traditional financial systems. For retail investors, this could mean more straightforward access to regulated investment products with the added benefits of blockchain's inherent security and transparency features.

Furthermore, the potential interoperability of BENJI tokens with other digital tokens opens up a myriad of possibilities for future integrations and use cases, underscoring the scalability and adaptability of Franklin Templeton's approach.

Market Research Analyst

The ability to use USDC to purchase shares in a U.S.-registered mutual fund is a significant milestone in bridging the gap between traditional finance and the digital assets market. This strategic move by Franklin Templeton could appeal to both traditional investors looking for the stability of government securities and digital-native investors who prefer the convenience and capabilities of blockchain technology.

For retail investors, the seamless conversion process facilitated by Zero Hash means quicker, more efficient transactions and potentially lower fees, making investing more accessible. The potential future inclusion of these services in the mobile app indicates a commitment to broader accessibility, which could significantly expand the user base over time.

In the short term, this announcement could generate increased interest and investment in the Franklin OnChain U.S. Government Money Fund, given the combined benefits of stable yield and blockchain integration. Long-term, it could enhance Franklin Templeton's reputation as an innovator in the financial services industry, attracting a diverse range of investors and potentially driving greater adoption of blockchain-based financial products.

Investors may now use USDC to fund their accounts to purchase shares in the first and only U.S.-registered mutual fund to process transactions and record ownership on a public blockchain

SAN MATEO, Calif.--(BUSINESS WIRE)-- Franklin Templeton today announces that users on the Benji Investments platform can convert USDC stablecoin to U.S. dollars (“USD”) to fund their investment in shares of the Franklin OnChain U.S. Government Money Fund (FOBXX) (the “Fund”). One share of the Fund is represented by one “BENJI token.”

USDC to USD conversion services are provided by Zero Hash, a crypto and stablecoin infrastructure platform that supports over 60 digital assets across a multitude of blockchains. Zero Hash conversion services allow investors to convert USDC to USD, which in turn is transferred to their Franklin Templeton account and used to seamlessly purchase BENJI tokens. Investors in the Fund may also use Zero Hash services to convert USD proceeds from the sale of BENJI tokens to USDC.

The feature will be immediately available to certain institutional wallets on the Benji Investments platform and shareholders of the Fund may initiate conversions at any time. USDC conversion services for individual investors using the Benji Investments mobile app may be enabled in the future.

“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. “This is an exciting step in our continued journey to make the digital assets ecosystem more accessible to both traditional and blockchain-native investors. We are also building the framework for BENJI tokens to be interoperable with additional tokens in the not-too-distant future.”

The Franklin OnChain U.S. Government Money Fund was launched in 2021 and is the first and only U.S.-registered fund to use a public blockchain as the system of record to process transactions and record share ownership. The Fund offers a competitive yield and is a regulated 1940 Act fund that invests at least 99.5 percent of its total assets in government securities, cash and repurchase agreements collateralized fully by government securities or cash. The Fund’s investment objective is to provide investors with as high a level of current income as is consistent with the preservation of shareholders’ capital and liquidity and aims to maintain a stable $1.00 share price. In April 2024, Franklin Templeton announced that institutional BENJI token holders now have the ability to transfer shares from one shareholder to another shareholder (“peer-to-peer”) on the public blockchain.

Individual investors can gain exposure to the Fund in digital wallets through the Benji Investments app, available in mobile app stores for Android and Apple devices. Institutional investors can gain exposure through the Benji Institutional web portal.

About Franklin Templeton

Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and over $1.6 trillion in assets under management as of April 30, 2024. For more information, please visit franklintempleton.com and follow us on LinkedIn, Twitter and Facebook.

You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor is not required to reimburse the fund for losses, and you should not expect that the sponsor will provide financial support to the fund at any time, including during periods of market stress. Although the fund invests in U.S. government obligations, an investment in the fund is neither insured nor guaranteed by the U.S. government.

All investments involve risk, including loss of principal. There are risks associated with the issuance, redemption, transfer, custody, and record keeping of shares maintained and recorded primarily on a blockchain. For example, shares that are issued using blockchain technology would be subject to risks, including the following: blockchain is a rapidly-evolving regulatory landscape, which might result in security, privacy or other regulatory concerns that could require changes to the way transactions in the shares are recorded. The fund's yield may be affected by changes in interest rates and changes in credit ratings. These and other risks are discussed in the fund’s prospectus.

Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial professional, call us at (800) DIAL BEN/342-5236 or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money.

Zero Hash Disclosures

Zero Hash services and product offerings may not be available in all jurisdictions. Zero Hash accounts are not subject to FDIC or SIPC protections, or any such equivalent protections that may exist outside of the U.S. Zero Hash’s technical support and enablement of any asset is not an endorsement of such asset and is not a recommendation to buy, sell, or hold any crypto asset. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero. Zero Hash is not registered with the SEC or FINRA. Zero Hash does not provide any securities services and is not a custodian of securities, including security tokens, on behalf of customers.

On and off ramping of USDC services for the Benji Investments platform are not currently available to New York persons.

Copyright © 2024. Franklin Distributors, LLC. Member FINRA/SIPC. All rights reserved.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240606540453/en/

Franklin Templeton Corporate Communications:

Travis Fishstein, (917) 822-1857, travis.fishstein@franklintempleton.com

Source: Franklin Templeton

FAQ

What is the benefit of converting USDC on the Benji Investments platform?

Converting USDC enables seamless funding and investment in the Franklin OnChain U.S. Government Money Fund, offering the stability of a mutual fund with blockchain technology benefits.

How does Zero Hash facilitate USDC conversions for BENJI tokens?

Zero Hash provides the infrastructure to convert USDC to USD, which is then used to purchase BENJI tokens representing shares in the fund.

When was the Franklin OnChain U.S. Government Money Fund launched?

The fund was launched in 2021.

What assets does the Franklin OnChain U.S. Government Money Fund invest in?

The fund invests 99.5% of its assets in government securities, cash, and repurchase agreements collateralized by government securities or cash.

Can individual investors use the USDC conversion feature on Benji Investments?

Currently, the USDC conversion feature is available for institutional investors, with plans to expand to individual investors in the future.

What is the investment objective of the Franklin OnChain U.S. Government Money Fund?

The fund aims to provide as high a level of current income as consistent with the preservation of capital and liquidity, while maintaining a stable $1.00 share price.

What is the significance of BENJI tokens?

BENJI tokens represent shares in the Franklin OnChain U.S. Government Money Fund, providing a unique blend of blockchain technology and traditional mutual fund benefits.

Is there peer-to-peer transfer capability for BENJI token holders?

Yes, institutional BENJI token holders can transfer shares peer-to-peer on the public blockchain.