Payward, the parent of crypto exchange operator Kraken, and Franklin Templeton have started to shed light on their new partnership, one of the most significant direct collaborations to date between a crypto-native platform and a major traditional asset manager. The converts to tokenized funds and stocks are likely to be investors who have already dabbled in crypto and new customers, according to two senior executives.
Kraken, Franklin Templeton Target Existing Crypto Users for Tokenization Growth
15 May 2026 - 15:00 CEST
By Stu Clelland
The collaboration, announced on 12 May at the SALT Bermuda Digital Finance Forum, will bring Franklin Templeton’s BENJI tokenized money market fund onto Kraken’s platform and explore tokenized exchange-traded funds, or ETFs, plus actively managed strategies through Kraken’s xStocks system.
Franklin Templeton manages $1.74tn in assets under management (AUM). Kraken’s xStocks – a platform that turns real stocks and ETFs into digital tokens tradable on blockchain networks – has already processed more than $30bn in cumulative trading volume since launching in 2025.
BENJI collateral, cash management
The initial focus is on integrating Franklin Templeton’s BENJI tokenized money market fund (FOBXX) with Kraken. BENJI operates like a digital version of a traditional money market fund. It holds short-term US government securities and aims to maintain a stable $1.00 value per share. It is the first US-registered money market fund to use a public blockchain as its system of record.
Speaking to Sandmark in an exclusive joint interview in Hamilton, Bermuda, Dave Ripley, co-CEO of Kraken, described the importance of the tie-up: "This is the most significant direct partnership that we have with an asset management firm, and it’s not just any asset management firm, it’s 1.7 trillion [dollars] plus." Ripley explained that institutional clients like hedge funds and professional traders will be able to hold BENJI tokens as collateral. This allows them to earn yield – essentially daily interest – on cash that would otherwise sit idle, while using it to support trading in crypto, stocks, derivatives and other assets, all on one platform.
BENJI trades and settles 24 hours a day, seven days a week. Yield accrues second by second, and interest payments drop directly into digital wallets every single day. As of late April, the BENJI suite held nearly $2bn in assets – all from new customers to Franklin Templeton – with more than $211mn in peer-to-peer transfers already completed.
Its net expense ratio is lower than a good deal of traditional money market funds, thanks to blockchain efficiencies that reduce settlement costs. Institutions may also receive better lending terms, known as haircuts, when using BENJI as collateral compared with stablecoins, thanks to its long track record of regulation as a 2a-7 fund. These are highly regulated US vehicles that must follow strict SEC rules on the quality, maturity and liquidity of their investments to keep risk extremely low and maintain a stable $1.00 share price.
xStocks expansion, future products
Kraken will add selected Franklin Templeton ETFs to its xStocks platform in tokenized form. The platform already features around 100 single stocks and ETFs in this format, with each digital token backed by real underlying assets held safely in regulated custody.
The partners plan to jointly develop new actively managed onchain products, drawing on Franklin Templeton’s deep expertise across equities, fixed income, private markets and alternatives. This builds on Kraken’s success in attracting diverse audiences and Franklin Templeton’s ability to design products tailored to investors who have built wealth in cryptocurrency.
Sandy Kaul, head of digital assets at Franklin Templeton, said every partnership starts modestly. "These are our first steps with Kraken, and the first of many that we plan on doing together." Kaul emphasized BENJI’s digitally native design, which enables intraday features that traditional funds, reliant on end-of-day processing, cannot offer. "We are the only digitally native tokenized money market fund globally," she added.
Ripley positioned the deal within the industry shift from stablecoins – digital dollars now being worth more than $200bn in total – towards broader tokenized asset classes.
Compliance, new asset flows
Compliance is shared. Franklin Templeton, as issuer of BENJI, retains full regulatory responsibility and can freeze or redeem tokens if needed. For xStocks products, Kraken handles platform requirements while underlying assets remain with regulated custodians. BENJI already runs across multiple public blockchains, including its original network Stellar (XLM), Ethereum (ETH), Solana (SOL), Arbitrum (ARB), Base (BASE) and Polygon (MATIC).
Both executives stressed the goal is to attract net-new money from crypto investors diversifying their holdings, rather than to migrate Franklin Templeton’s existing traditional assets. As Kaul noted, BENJI’s growth to date has come entirely from customers new to the firm. No specific targets for assets or volumes on Kraken were disclosed. Some preparatory elements, such as existing BENJI operations on other chains and Kraken’s live xStocks infrastructure, are already active. Specific integrations for this partnership are expected to roll out in the coming months.
Context in tokenized markets
Tokenized real-world assets – traditional investments placed on blockchain networks – excluding stablecoins, now total more than $30bn. Leading competitors include BlackRock’s BUIDL fund (approximately $2.3bn – $2.5bn), Ondo Finance’s USDY and OUSG products (combined roughly $2.7bn – $3bn) and WisdomTree’s tokenized offerings (around $770mn – $860mn).
The GENIUS Act, a 2025 US law establishing a framework for stablecoins with strict reserve and disclosure rules, creates a supportive environment. Regulated tokenized funds like BENJI combine established oversight with blockchain speed and programmability.
BENJI mechanics
One BENJI token represents one share of the underlying US government money market fund. The structure enables 24/7 trading and settlement, second-by-second yield accrual, daily interest payments directly to wallets, and full peer-to-peer transfers on supported blockchains. Franklin Templeton retains all regulatory controls as issuer, including the ability to freeze or redeem tokens. This delivers a modern cash equivalent that earns yield while remaining highly liquid and usable as collateral.
Future pipeline
The partners intend to develop additional novel products specifically for crypto-native investors who have accumulated wealth in digital assets and now want broader diversification. Kaul noted that Franklin Templeton’s full range of capabilities, combined with Kraken’s deep understanding of its audience, will allow the creation of tailored solutions.
Ripley drew parallels to the stablecoin journey. Early users adopted stablecoins primarily for access to US dollars. Over time, as adoption grew, these same assets became tools for more sophisticated uses, such as efficient cross-border payments and collateral optimization. The executives see a similar flywheel effect unfolding with tokenized funds and equities.
