Franklin Templeton launches Hong Kong’s first tokenized money-market fund

Global asset manager Franklin Templeton Investments has launched the Franklin OnChain US Government Money Fund, the first tokenized money-market fund in Hong Kong. This move aligns with the government’s new five-year fintech plan to integrate AI and blockchain technology in finance.

The first-of-its-kind tokenized money market fund is registered in Luxembourg and backed by short-term US Treasuries. Its function is to establish blockchain-based tokens to represent investor shares and keep a digital record of ownership. 

The tokenized money-market fund also marks the first successful initiative under the Hong Kong Monetary Authority’s Fintech 2030 plan. Chief Executive Eddie Yue Wai-man made the “Fintech 2030” strategy public this week.

Global asset managers are increasingly adopting tokenization in their operations 

The “Fintech 2030” programme includes more than 40 measures to integrate AI, set up a tokenisation system and strengthen the resilience of the financial sector.

Regarding this progress, Yue commented that the Hong Kong Monetary Authority (HKMA) is developing a framework for tokenized deposit settlements that can eventually include a central bank digital currency (CBDC) for bank transactions, according to a South China Morning Post report. 

Yue shared these plans in his latest article, which also highlighted the achievements they have made so far in their “Fintech 2025” strategy. The executive also discussed the future direction of the initiative, which aims to cement Hong Kong’s position as a global fintech leader.

Yue noted that “Financial infrastructure is like a highway, enabling capital and financial assets to travel safely and efficiently through our economy.”

The CEO pointed out the need to build this financial infrastructure, stating, “For Hong Kong’s digital economy to thrive, not only do we need those as mentioned earlier ‘soft infrastructure,’ robust financial ‘hard infrastructure’ is equally crucial.”

Franklin Templeton is partnering with HSBC and OSL Group on Project Ensemble to establish this framework effectively. OSL Group is a licensed virtual asset platform in Hong Kong.

Notably, this project is part of the HKMA’s sandbox testing of tokenized deposits and money transfers. HSBC leaders say this setup could permit nearly instant settlements between traditional and blockchain-based systems. 

In the meantime, Franklin Templeton introduced Hong Kong’s first tokenized fund, following the observation that global asset managers were increasingly adopting tokenization to enhance efficiency and transparency. 

This shift towards tokenization followed a report from Ripple and the Boston Consulting Group, dated April of this year, which forecasted that the value of tokenized real-world assets would escalate from approximately $36 billion today to $19 trillion by 2033. 

Institutional investors increase their confidence in blockchain-based assets

As tokenization becomes increasingly popular in the ecosystem, sources noted that institutional investors are swiftly shifting their focus towards tokenization technology and blockchain last month.

This followed their belief that their average investment in digital assets will double in the next three years, according to a recent study by State Street, a global leader in custody and asset management.

The reports also noted that around 60% of firms plan to increase their digital asset exposure significantly next year. This is indicative of continued strong institutional confidence in the long-term role of blockchain-represented digital assets.

The results are part of State Street’s 2025 Digital Assets Outlook, which aggregated views from top executives at asset managers and owners around the world as to how they feel, what they are planning, and how adventurous (or otherwise) their approach is towards new technologies.

Meanwhile, it is worth noting that State Street, founded in 1792 and based in Boston, is ranked as one of the key financial institutions globally. As of June 30, 2025, it managed approximately $49 trillion in assets under custody and administration, and around $5.1 trillion through its investment division.