Hong Kong Makes History: Franklin Templeton Unveils First Tokenized Money Fund
Hong Kong has achieved a major leap forward in its fintech transformation with the launch of its first-ever tokenized money fund, signaling a new era in digital finance and asset tokenization. The global investment powerhouse Franklin Templeton announced the debut of the Franklin OnChain U.S. Government Money Fund, marking the city’s entry into blockchain-based investment infrastructure.
This milestone underscores Hong Kong’s commitment to becoming a leading global fintech hub under its Fintech 2030 strategy, driven by innovation in blockchain, artificial intelligence (AI), and digital assets.
Franklin Templeton Launches Hong Kong’s First Tokenized Fund
Franklin Templeton, one of the world’s largest asset managers, unveiled the fund as the first Luxembourg-registered tokenized UCITS (Undertakings for Collective Investment in Transferable Securities) product accessible to institutional and professional investors in Hong Kong.
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| Source: FranklinTempleton |
The initiative allows investors to hold blockchain-based tokens representing shares of the fund, which invests primarily in short-term U.S. government securities. These digital tokens are recorded and managed via Franklin Templeton’s proprietary blockchain system, enabling faster, more secure, and fully transparent transactions.
Unlike traditional fund structures that depend on centralized recordkeeping, the blockchain-based system provides near real-time validation and ownership tracking, drastically reducing administrative costs and settlement times.
Supporting Hong Kong’s Fintech 2030 Vision
The launch comes shortly after the Hong Kong Monetary Authority (HKMA) announced its Fintech 2030 plan, a strategic roadmap featuring over 40 initiatives to enhance the city’s competitiveness in financial technology.
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| Source: info.gov.hk |
The HKMA’s Chief Executive, Eddie Yue Wai-man, emphasized that the strategy will prioritize advancements in areas such as blockchain, artificial intelligence, and digital banking ecosystems. The authority is currently conducting pilot programs exploring tokenized deposits and fund settlements, as part of an effort to integrate these with potential central bank digital currency (CBDC) frameworks for faster, more efficient interbank payments.
The collaboration between Franklin Templeton, HSBC, and OSL Group — one of Hong Kong’s licensed virtual asset service providers — further demonstrates the city’s intent to connect traditional finance (TradFi) with blockchain-driven finance (DeFi). This initiative could set a precedent for future financial instruments that blend regulatory compliance with blockchain transparency.
How the Tokenized Money Fund Works
The Franklin OnChain U.S. Government Money Fund operates similarly to a traditional money market fund but utilizes blockchain for recordkeeping and distribution.
Investors receive tokenized shares on a secure, permissioned blockchain platform, ensuring each transaction is verifiable and immutable. This system delivers several key benefits:
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Increased transparency: Every share issuance and redemption is recorded on-chain, ensuring a full audit trail.
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Operational efficiency: Smart contracts automate transactions, reducing manual intervention and administrative costs.
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Liquidity and security: Investors can easily redeem or transfer tokenized shares with faster settlement times than traditional systems.
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Global accessibility: Institutional investors in Hong Kong can access a U.S.-based fund through a compliant and secure digital framework.
According to Franklin Templeton, this marks the first complete end-to-end tokenized investment product in Hong Kong — covering issuance, distribution, and servicing — all conducted through distributed ledger technology (DLT).
A Global Shift Toward Tokenization
The move by Franklin Templeton is not an isolated development but part of a global trend toward real-world asset (RWA) tokenization, where physical and financial assets are represented digitally on blockchains.
This transformation promises to modernize financial markets, providing more transparency, speed, and inclusivity across investment channels. Institutions are increasingly exploring tokenization to bridge gaps between traditional financial systems and decentralized technologies.
A report by Standard Chartered Bank projects the market capitalization of tokenized real-world assets (excluding stablecoins) could surge from around $35 billion today to $2 trillion by 2028 — a staggering 5,600% increase within just three years.
Similarly, research by Ripple and Boston Consulting Group (BCG) suggests the broader tokenization industry could reach $19 trillion by 2033, as more funds, bonds, and deposits move to blockchain networks.
Such growth is being driven by institutional adoption, regulatory clarity, and the global race toward central bank digital currencies (CBDCs), which are expected to streamline cross-border settlements and enhance transparency.
Institutional Momentum in Digital Assets
Franklin Templeton’s initiative follows a growing list of major institutions entering the blockchain space. The firm, managing over $1.5 trillion in assets, has been experimenting with blockchain applications since 2019. Its earlier Benji Investments App in the U.S. was one of the first retail-facing blockchain-based investment tools approved by regulators.
Now, with the Hong Kong tokenized fund, the company aims to scale these innovations globally, creating a blueprint for cross-border blockchain finance.
Other global players, including BlackRock, HSBC, and Goldman Sachs, have also announced projects exploring tokenized bonds, funds, and securities.
According to industry analysts, tokenized funds could become a core infrastructure of the financial world by the end of the decade, enabling 24/7 trading, instant settlement, and programmable compliance.
Hong Kong’s Competitive Edge in Fintech
With supportive regulation, robust financial infrastructure, and a pro-innovation government stance, Hong Kong is positioning itself as Asia’s digital finance leader.
The Fintech 2030 initiative highlights three key focus areas:
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Digital Asset Infrastructure: Establishing compliant frameworks for tokenized securities, funds, and payments.
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AI-Driven Innovation: Encouraging financial institutions to adopt AI in risk assessment, credit scoring, and customer services.
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Cross-Border Collaboration: Building financial bridges between Hong Kong, Mainland China, and international markets.
As the city continues to refine its regulatory sandbox for digital assets, more institutional products like Franklin Templeton’s tokenized fund are expected to emerge.
Eddie Yue, speaking at the Fintech Week 2025 event, noted that “the future of finance is borderless, programmable, and transparent — and tokenization is the foundation of that vision.”
The Future of Tokenized Finance
Experts predict that 2025–2030 will mark the decade of asset tokenization, with financial markets transitioning from paper-based to fully digital infrastructure.
The combination of blockchain, regulatory clarity, and growing institutional participation could unlock trillions in liquidity, reshaping how funds are issued, traded, and managed.
For Hong Kong, this development is more than a technological milestone — it’s a statement of intent to lead Asia’s digital finance revolution. With Franklin Templeton’s pioneering move, the city is taking a decisive step toward realizing its Fintech 2030 dream, blending innovation, compliance, and global financial integration.
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