Franklin Templeton Launches Hong Kong's First Tokenized Money-Market Fund with Future Retail Plans

Global asset manager Franklin Templeton has introduced the first Luxembourg-registered tokenized money-market fund in Hong Kong.

Key Takeaways:

Franklin Templeton debuts Hong Kong's first tokenized money-market fund, which invests in short-term U.S. government securities.
Initially available only to institutional investors, this fund aims to enhance transaction transparency and efficiency through blockchain technology.
A retail version of the fund is planned, pending approval from the Securities and Futures Commission (SFC), which will broaden access to tokenized investment opportunities in Hong Kong.

The Franklin OnChain US Government Money Fund focuses on short-term U.S. government securities, with shares represented as blockchain tokens, as reported by the South China Morning Post.

Franklin Templeton Launches Tokenized Money-Market Fund in Hong Kong, Eyes Retail Expansion

Franklin Templeton Aims for Retail Market with New Fund

The fund is currently open only to institutional and professional investors possessing a minimum of HK$8 million (about US$1 million) in assets. It leverages distributed ledger technology to improve transparency and efficiency in processing transactions and recording ownership.

“This launch demonstrates our commitment to providing innovative investment solutions while enhancing access to tokenized products in this vibrant market,” stated Tariq Ahmad, head of Asia-Pacific at Franklin Templeton.

He further mentioned plans to introduce a retail-friendly version, pending approval from Hong Kong's SFC, as part of the company's mission to make digital asset investment more accessible.

The fund’s launch represents the initial step under the Fintech 2030 plan, announced by Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority (HKMA), this week.

This five-year roadmap includes over 40 initiatives aimed at fostering the adoption of tokenization, artificial intelligence, and central bank digital currency (CBDC) within Hong Kong’s financial landscape.

Franklin Templeton has developed the blockchain platform for this new fund and formed a partnership with HSBC and OSL Group—the operator of Hong Kong’s pioneering licensed virtual asset exchange—through the HKMA’s Project Ensemble.

HSBC is investigating the implementation of tokenized deposits to facilitate nearly instant settlements for fund transactions, marking a significant step toward establishing an integrated digital asset infrastructure.

“Hong Kong is positioning itself as a trusted hub for institutional digital assets,” commented Brian Chen, head of OSL Wealth Management.

Since 2018, Franklin Templeton has been enhancing its blockchain capabilities, launching the world's first U.S.-registered blockchain-integrated mutual fund in 2021, along with various tokenized UCITS products across Luxembourg and Singapore.

The rollout of this fund in Hong Kong underscores Franklin Templeton's ambition to merge traditional finance with the rapidly evolving digital asset ecosystem.

Hong Kong's New Digital Asset Policy

Hong Kong has recently revealed its second key policy statement on digital assets, emphasizing stablecoin regulation and the tokenization of real-world assets (RWA) as central to its plan to establish itself as a global fintech leader.

The new “LEAP” framework prioritizes legal clarity, ecosystem expansion, real-world adoption, and talent development, featuring a stablecoin licensing program set to commence on August 1.

Additionally, the government aims to regulate tokenized government bonds and ETFs, facilitating secondary market trading of these products on licensed digital asset platforms.

Plans are also in place to extend tokenization efforts into sectors such as metals and renewable energy, showcasing potential applications like gold and solar panels.

According to reports, professionals in the crypto and hedge fund sectors are significantly contributing to Hong Kong's residential rental market, which is currently facing challenges due to weaker traditional demand.