Institutions can now move stablecoins into Franklin Templeton's tokenized money market fund around the clock via MoonPay Trade. Redemption speed and stablecoin stability remain key risks.
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Franklin Templeton and MoonPay have integrated their platforms to let eligible institutions exchange stablecoins for shares of the asset manager's tokenized money market fund around the clock. The connection links Franklin Templeton's Benji Technology Platform with MoonPay Trade's infrastructure, creating a direct onchain path for institutional investors to move between supported stablecoins and yield-bearing fund exposure without leaving blockchain networks.
The partnership arrives as Franklin Templeton deepens its digital asset footprint. In April, the $1.74 trillion asset manager unveiled plans to launch Franklin Crypto, a dedicated cryptocurrency division anchored by the acquisition of crypto investment firm 250 Digital. The new unit will focus on active crypto strategies, while the firm continues building tokenized versions of traditional products.
Unlike traditional money market funds, which typically require investors to hold positions through the end of a trading day to accrue interest, tokenized funds can distribute yield based on the exact period an investor holds the asset. That difference matters in crypto markets that never close.
Sandy Kaul, Franklin Templeton's head of innovation and digital assets, described the value proposition directly. "We trade 24/7 in the crypto markets," she told CoinDesk. Tokenized funds let institutional holders park stablecoin balances in a yield-generating instrument and exit at any time, matching the continuous trading rhythm of digital asset markets.
The workflow is straightforward: an institution deposits supported stablecoins via MoonPay Trade, receives shares of the tokenized money market fund, and earns yield that accrues minute-by-minute. Redemption reverses the process, converting fund shares back into stablecoins onchain.
Kaul said the new workflow responds to direct requests from clients. "We had tremendous demand for this," she said, referring to the ability to shift between stablecoins and tokenized money market funds at any hour while maintaining yield exposure.
She framed the partnership as part of a broader shift she expects to accelerate in 2026, which she called "the year of the universal liquidity layer." In that vision, stablecoins, tokenized funds, and other forms of digital money become interoperable across trading, lending, and collateral applications. The Franklin Templeton-MoonPay connection is a concrete step toward that goal, giving institutions a rail to move between cash-like stablecoins and a regulated, yield-bearing fund without manual offchain steps.
The move also expands MoonPay's role beyond crypto trading and payments into tokenized real-world assets, an area drawing growing interest from traditional finance firms that want to bring regulated investment products onchain. MoonPay Trade provides the settlement infrastructure, while Franklin Templeton's Benji Platform handles the fund issuance and redemption.
Any bridge between stablecoins and an onchain fund introduces a primary risk vector: stablecoin de-pegging. If a supported stablecoin loses its peg during a market stress event, institutions holding that stablecoin on the MoonPay-Franklin Templeton rail could face a gap between the stablecoin's market value and the fund's net asset value. The fund itself may not accept a de-pegged stablecoin at par, or the platform may suspend conversions. The worst-case scenario is a liquidity freeze where fund shares cannot be redeemed because the stablecoin entry point is compromised.
A de-pegging event would break the 24/7 availability promise, even temporarily. The supported stablecoin list typically includes USDC and USDT, both of which have experienced de-pegging episodes in the past.
Tokenized funds still depend on the underlying fund's redemption cycle. While the workflow is onchain, the actual settlement of fund shares may involve offchain steps such as KYC verification or batch processing. The source material notes that "Liquid Lane aims to solve a key bottleneck that is holding back growth of tokenized funds and credit: long redemption times" – a reminder that the industry is still working on same-settlement finality for fund redemptions. Any delay between a stablecoin deposit and fund share issuance, or between a redemption order and stablecoin payout, undermines the 24/7 promise.
If redemption takes hours rather than minutes, the product loses its edge over traditional money market funds that settle within a day.
Franklin Templeton operates under SEC and other regulatory frameworks. If U.S. or European regulators reclassify stablecoins as securities or impose new custody rules, the partnership's compliance costs could rise, or the supported stablecoin list could shrink. The asset manager's size ($1.74 trillion) gives it compliance resources, regulatory shifts remain an exogenous risk.
A competing product from a larger asset manager, such as BlackRock's BUIDL fund, could also siphon demand if it offers lower fees or faster settlement.
Bottom line for traders: The Franklin Templeton-MoonPay partnership removes a pain point for institutions that hold stablecoin positions and want yield without exiting crypto rails. The mechanism is straightforward – onchain swap for a regulated fund share – the risk lies in stablecoin stability and redemption finality. If both hold under stress, the product could accelerate the migration of institutional cash into tokenized money markets. If either breaks, the 24/7 yield promise becomes an operational liability.
For more on how traditional asset managers are bringing regulated products onchain, see Backpack Securities Blends Brokerage with Tokenized Stocks and the broader crypto market analysis section.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.