Case study

How Franklin Templeton created the first U.S.-registered mutual fund on a public blockchain

Location

United States

Use cases

About

Franklin Templeton is a 79-year-old asset manager with $1.7 trillion under management, serving institutional and retail investors across mutual funds, ETFs, and alternative strategies. In April 2021, the firm launched the Franklin OnChain U.S. Government Money Fund (FOBXX) on Stellar, making it the first U.S.-registered money market fund to use a public blockchain as the official system of record for processing transactions and recording share ownership.

Known by its token ticker BENJI, the fund accrues yield continuously and reflects it in holder balances throughout the day—not monthly, as with traditional money market funds. Its 0.15% management fee is among the lowest of any tokenized money market fund. Both features flow from running the share registry onchain, which removes layers of legacy fund administration. The fund holds at least 99.5% of its assets in short-term U.S. government securities, cash, and government-collateralized repurchase agreements, targeting a stable $1.00 NAV per share.

Five years later, Stellar is BENJI's #1 chain by number of users, with monthly transfer activity up 30x since launch. Institutional growth has scaled through the fund's collateral program, while the $654M in AUM on Stellar remains the hub for retail usage and new utility features—part of $2B in total AUM across all chains.

Challenge

U.S.-registered mutual funds operate under strict SEC obligations that do not always translate neatly to the capabilities of a public blockchain. In Franklin Templeton’s case, they needed to:

know every holder of BENJI
authorize every share transfer
have the power to freeze an account and clawback shares if a court ordered it

Moreover, in 2018, when Franklin Templeton started evaluating blockchains, they sought infrastructure that could enforce those controls natively, with as few dependencies as possible between the fund and its regulatory obligations. In other words, they preferred these capabilities as features of the protocol itself rather than as add-ons on via smart contracts. The controls also had to be production-ready, not theoretical or in development since the fund would be reporting to the SEC from inception.

That ruled out most public chains at the time.

In 2021, we launched BENJI on Stellar to reshape investment management with greater transparency and lower financial product costs. Five years later, that vision is now a rapidly growing market and BENJI is its blueprint.

Sandy Kaul, Head of Innovation at Franklin Templeton

Solution

Stellar supports three tokenization models, each suited to a different kind of asset. In 2021, Franklin Templeton chose the Stellar Asset model for BENJI, and the model has supported every expansion of the asset since.

In practice, Franklin Templeton manages the BENJI holder list directly through the Stellar ledger. When an investor completes KYC, Franklin Templeton authorizes their wallet to hold BENJI; wallets without authorization cannot receive the token. If a court orders shares recovered from a sanctioned account, Franklin Templeton can execute a clawback that settles within 5 to 7 seconds, just like any other Stellar transaction.

That simplicity gave Franklin Templeton a foundation to build on.

Stellar assets

Tokens issued at the protocol layer with built-in controls (authorization flags, freeze, clawback) audited at the network level. Every Stellar Asset comes with a paired Stellar Asset Contract (SAC) that implements the SEP-41 token interface, so the same asset can be called directly from smart contracts without bridging or re-issuing.

Contract tokens

Custom WASM smart contracts (analogous to ERC tokens in the EVM world) that give issuers full programmability to implement standards like ERC-1400, ERC-20, or their own bespoke logic when tokenomics go beyond what the SAC provides.

SEP-57 / ERC-3643 tokens

Contract-token standards designed for regulated RWAs that need on-chain identity and compliance rules, with interoperability across Ethereum's ERC-3643 ecosystem.

Why Franklin Templeton Built on Stellar

Protocol-level issuer controls

Authorization and clawback are native Stellar operations, guaranteed by the chain
No custom smart contract code sits between BENJI and its SEC obligations
Franklin Templeton manages the holder list directly through the ledger

Low-cost, high-speed settlement

Transaction fees on Stellar are a fraction of a cent
Settlement finality in 5 to 7 seconds, 24/7
Cost structure supports BENJI's 0.15% management fee, among the lowest of any tokenized money market fund

Configurable compliance for any asset

Stellar Assets for protocol-level issuer control, the model BENJI uses
SEP-41 contract tokens for programmable Soroban token logic
SEP-57 / ERC-3643 (T-REX) for institutional RWAs needing on-chain compliance and Ethereum interoperability

We ultimately chose Stellar because it enabled us to meet these certain token-level controls that met the SEC's strict criteria of operating a mutual fund onchain.

Ric Golubov, Vice President, Digital Assets Business Development & Partnerships at Franklin Templeton

Results

A five-year operating record

The fund’s intentional architecture has supported its steady expansion over the last few years:

June 2024: Franklin Templeton integrated with Zero Hash so institutional investors could subscribe and redeem using USDC.
March 2025: The firm launched gBENJI, a Luxembourg-registered UCITS SICAV version of the fund on the same Stellar infrastructure, extending BENJI to non-US investors. gBENJI sits within a broader suite of share classes—including sgBENJI for Singapore and grBENJI for Europe—designed to make the fund available to institutional and retail investors worldwide.
May 2025: After an 18-month regulatory review with the SEC, peer-to-peer share transferability was extended to retail holders, making BENJI the first money market fund to offer peer-to-peer transferability of shares. Cumulative P2P transfer volume has since passed $211 million.

The fund's utility is also extending beyond investment. Franklin Templeton's pending acquisition of 250 Digital will use BENJI tokens as payment consideration, one of the first uses of a tokenized fund in corporate acquisition settlement.

In sum, BENJI is one of the largest U.S.-registered money market funds on a public blockchain and pioneered the tokenized fund category, which has surpassed $18 billion in value.