decrypt.co
Franklin Templeton Digital Assets said on Tuesday that it’s rolling out a new feature for its Benji platform that aims to improve upon existing standards for calculating and distributing yield via blockchain.
The patent-pending feature, dubbed “intraday yield,” will track investors’ holdings of tokenized securities down to the second, allowing them to earn yield on assets that are held for only part of a given day, the 78-year-old bank said in a statement on Tuesday. This yield is calculated and paid each calendar day, including days when Wall Street is officially closed, the bank added.
Typically, yield is calculated at the end of each trading day, with interest on assets like money-market funds paid out monthly. In a statement, Roger Bayston, head of digital assets at Franklin Templeton, said the feature reflects how blockchains are increasingly being used to create modern-day plumbing for the U.S. financial system.
“We believe features that are possible due to the composability of the blockchain environment, like intraday yield, have the potential to become an industry standard,” he said in a statement.
Whether its equities, bonds, or real estate, tokenization refers to the process by which real-world assets are represented and traded on-chain using tokens. In 2021, Franklin Templeton debuted the Franklin OnChain U.S. Government Money Fund on its Benji platform, or FOBXX, representing the first U.S.-registered mutual fund launched on-chain.
In an interview with Decrypt, Bayston said that he believes Franklin Templeton’s feature will likely find use within the cryptosphere. Intraday yield, with FOBXX, will allow traders that post collateral for leveraged trades to earn income on what otherwise could be static stablecoins.
The fund’s BENJI tokens resemble stablecoins, as assets pegged to the price of the dollar, and they have been issued across eight different networks, according to crypto data provider rwa.xyz. Among $775 million in BENJI tokens, $490 million exist on the layer-1 network Stellar (others include Ethereum, Avalanche, and Solana).
Bayston said that intraday yield will be rolled out on Stellar first, but eventually the feature will apply to BENJI tokens issued on all compatible networks.
Franklin Templeton said on Tuesday that its platform will now support wallet-to-wallet token transfers on supported blockchains, while also letting investors use stablecoins to purchase or redeem tokenized securities on its Benji platform.
When it comes to tokenized securities, BlackRock’s USD Institutional Digital Liquidity Fund (or BUIDL) holds the greatest market share, with a $2.9 billion footprint, per rwa.xyz data. Among estimates, British multinational bank Standard Chartered sees tokenized assets growing to $30 trillion by 2030.
With crypto legislation being weighed on Capitol Hill, a new series of financial titans could offer crypto-based products, if the bills give them the clarity they say they need. Although Benji primarily supports Franklin Templeton’s funds, the bank said that its platform could be leveraged by institutions and asset managers as a “white label” solution for tokenizing theirs.
“It's come with a lot of regulatory hurdles,” Bayston said. “But having gotten there, having those permissions certainly eases the transition for others who might want to use the same platform.”
Edited by James Rubin