Global asset manager Franklin Templeton has launched the first Luxembourg-registered tokenized money market fund in Hong Kong.
Key points to remember:
- Franklin Templeton has launched Hong Kong’s first tokenized money market fund investing in short-term US government securities.
- The fund, initially open to institutional investors, uses blockchain to enhance the transparency and efficiency of transactions.
- A commercial version is planned pending SFC approval, expanding access to tokenized investment products in Hong Kong.
The Franklin OnChain US Government Money Fund invests in short-term US government securities, with its shares represented as blockchain tokens, according to a report from the South China Morning Post.
Franklin Templeton targets retail market after launching tokenized fund
Initially open to institutional and professional investors with at least HK$8 million (US$1 million) in assets, the fund aims to improve transparency and efficiency by using distributed ledger technology to process transactions and record ownership.
“This launch reflects our commitment to providing innovative investment solutions and expanding access to tokenized products in this dynamic market,” said Tariq Ahmad, Head of Asia Pacific at Franklin Templeton.
He added that the company plans to introduce a retail-approved version, pending approval from the Hong Kong Securities and Futures Commission (SFC), as part of its efforts to democratize investment in digital assets.
The fund’s debut marks the first initiative under the Fintech 2030 plan, unveiled by Hong Kong Monetary Authority (HKMA) chief executive Eddie Yue Wai-man earlier this week.
The five-year roadmap includes more than 40 projects aimed at accelerating the adoption of tokenization, artificial intelligence and central bank digital currency (CBDC) in Hong Kong’s financial sector.
Franklin Templeton developed the blockchain platform hosting the new fund and partnered with HSBC and OSL Group, the operator of Hong Kong’s first licensed virtual asset exchange, through the HKMA’s Project Ensemble.
HSBC is exploring the use of tokenized deposits to enable near-instant settlements of funds transactions, a key step towards creating a fully integrated digital asset infrastructure.
“Hong Kong is becoming an institutionally trusted hub for digital assets,” said Brian Chen, head of OSL Wealth Management.
Franklin Templeton has been building its blockchain capabilities since 2018, launching the first blockchain-integrated mutual fund registered in the United States in 2021 and several tokenized UCITS products in Luxembourg and Singapore since then.
The Hong Kong rollout reinforces its ambition to bring traditional finance closer to the rapidly growing digital asset ecosystem.
Hong Kong announces new digital asset policy
Hong Kong has unveiled its second major policy statement on digital assets, placing stablecoin regulation and tokenization of real-world assets (RWA) at the heart of its strategy to become a global financial technology hub.
The new “LEAP” framework focuses on legal clarity, ecosystem growth, real-world adoption and talent development, with a stable licensing regime set to launch on August 1.
The government also plans to regulate government bonds and tokenized ETFs, paving the way for secondary market trading of these products on licensed digital asset platforms.
It aims to expand tokenization efforts into sectors such as metals and renewable energy, highlighting use cases such as gold and solar panels.
As noted, professionals working in the crypto and hedge fund industries play a key role in supporting Hong Kong’s residential rental market, which continues to struggle due to weakness in traditional demand sources.
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