Franklin Templeton's Tokenization Bet: XRP and Stellar

Franklin Templeton closed its acquisition of 250 Digital and launched a new division called Franklin Crypto. The $1.78 trillion asset manager is committing its own capital to liquid cryptocurrency strategies previously run by CoinFund, the firm said Monday.

The division will run active strategies on the XRP Ledger, Stellar, Polygon, and Aptos. Christopher Perkins, a crypto industry veteran, will head Franklin Crypto. Seth Ginns is chief investment officer. They will work with Tony Pecore from Franklin Templeton Digital Assets.

The acquisition was partially funded using BENJI tokens, the on-chain version of Franklin Templeton's money market fund. That move ties the firm's tokenization work directly to its crypto trading operations. BENJI tokens represent shares in the Franklin OnChain U.S. Government Money Fund, a registered fund that settles on blockchain.

Franklin Templeton has been active in crypto for years. It launched the first XRP ETF last year. The fund, ticker XRPZ, recorded the highest net inflow in its category during the week of June 14 to June 18, pulling in $6.7 million.

Earlier this week, the firm filed proposals for two Bitcoin-linked ETFs that allocate 95% to U.S. equities and 5% to Bitcoin. The filings show Franklin Templeton is building a suite of products that blend traditional assets with crypto exposure.

The launch of Franklin Crypto puts XRP, Stellar, Polygon, and Aptos in direct competition with Ethereum for institutional tokenization business. Franklin Templeton's choice of networks suggests those blockchains are gaining traction for regulated fund management. The BENJI token model could be replicated by other firms looking to offer on-chain money market funds. Franklin Templeton's XRP ETF saw $6.7 million in inflows last week, the highest in its category.