Franklin Templeton debuts Hong Kong’s first tokenized fund under new AI-driven fintech plan

Franklin Templeton has launched Hong Kong’s first tokenized money-market fund, coinciding with the government’s new five-year fintech strategy aimed at embedding artificial intelligence and blockchain across the financial sector.

The Franklin OnChain U.S. Government Money Fund, registered in Luxembourg and backed by short-term U.S. Treasuries, issues blockchain-based tokens that represent investor shares and record ownership digitally.

The launch is the first initiative under the Hong Kong Monetary Authority’s Fintech 2030 plan, unveiled this week by Chief Executive Eddie Yue Wai-man.

The plan outlines more than 40 measures to integrate AI tools, develop a tokenization ecosystem, and strengthen sector resilience. Yue said the HKMA is building a tokenized-deposit settlement framework that could later incorporate a central bank digital currency (CBDC) for interbank payments, according to the South China Morning Post.

Franklin Templeton is working with HSBC and OSL Group, one of Hong Kong's 11 licensed virtual-asset platforms, through Project Ensemble, an HKMA sandbox testing tokenized deposits and fund flows. HSBC executives said the setup could support near-instant settlement between traditional and blockchain-based systems.

Global asset managers have increasingly turned to tokenization to improve efficiency and transparency. A Ripple and Boston Consulting Group report from April projects that the value of tokenized real-world assets will expand from today's roughly $36 billion level to $19 trillion by 2033.