TLDR:
- Franklin Templeton launches first Luxembourg-based tokenized UCITS fund called Franklin OnChain U.S. Government Money Fund
- Fund will be available to institutional investors across 8 European countries
- Operates on Stellar blockchain using proprietary transfer agency platform
- Co-managed by team that runs similar US-registered fund launched in 2021
- Fund aims to maintain constant NAV of $1 by investing in US government securities
Franklin Templeton has introduced Europe’s first blockchain-based government money fund, marking a new chapter in the digitalization of traditional finance.
The asset management firm launched the Franklin OnChain U.S. Government Money Fund, a Luxembourg-registered UCITS SICAV product, in February 2025.
The fund represents the first fully tokenized UCITS product domiciled in Luxembourg and will be accessible to institutional investors across eight European countries: Austria, France, Germany, Italy, Liechtenstein, Netherlands, Spain, and Switzerland.
Built on the Stellar public blockchain, the fund utilizes Franklin Templeton’s in-house blockchain-enabled transfer agency platform. This technology implementation aims to provide investors with enhanced transparency in their transactions while maintaining robust security measures.
The fund’s primary objective is to deliver high current income while preserving capital and maintaining liquidity. It targets a constant Net Asset Value of USD 1, a common goal for money market funds seeking to provide stability to investors.
To achieve these objectives, the fund will invest in various U.S. government securities. These investments may include fixed-rate securities, floating-rate securities, and variable-rate securities. The fund also has the capability to engage in repurchase agreements that are fully collateralized by U.S. government securities or cash.
The management team brings together experienced professionals from different locations within Franklin Templeton. Shawn Lyons, CFA, based in San Mateo, will co-manage the fund alongside Boston-based team members Joanne Driscoll, CFA, and Michael Lima, CFA.
This same management team currently oversees the U.S.-registered version of the fund, which launched in April 2021. That fund made history as the first U.S. registered mutual fund to utilize a public blockchain for transaction processing and share ownership recording.
The launch follows regulatory approval received in October 2024, establishing the fund under the newly created Franklin Templeton OnChain Funds umbrella structure.
Blockchain Technology
The use of blockchain technology in the fund’s operations enables immediate transaction recording and verification. This feature provides real-time visibility into fund activities and ownership transfers.
The platform’s design incorporates multiple security layers to protect investor assets and information. These security measures are integrated into both the blockchain infrastructure and the transfer agency platform.
Franklin Templeton’s expansion into blockchain-based funds in Europe builds upon their experience with similar products in the U.S. market. The firm has developed expertise in combining traditional fund management with blockchain technology.
The fund’s structure allows for efficient processing of subscriptions and redemptions. The blockchain-based system can handle these transactions with automated verification and recording capabilities.
Institutional investors will have access to detailed transaction records through the blockchain platform. This transparency allows them to track their investments and verify transactions independently.
The fund operates within the established UCITS framework, ensuring compliance with European regulatory requirements while incorporating blockchain technology. This combination provides institutional investors with a regulated investment vehicle that leverages modern technology.
