Global investment management firm Franklin Templeton (NYSE:BEN) and Stellar, a blockchain development foundation, recently marked the fifth anniversary of the launch of BENJI, a tokenized version of the firm’s US-registered money market fund, FOBXX, which uses Stellar’s public blockchain as its system of record.
The fund offers 24/7 access and peer-to-peer transferability, as well as nearly instantaneous settlement alongside yield that accrues every second.
Part of Franklin Templeton’s broader suite of tokenized funds on the Benji platform, which deploys tokenized funds across multiple blockchains, Stellar’s BENJI now holds over US$650 million in value.
In an email to The Investing News Network (INN), Sandy Kaul, Franklin Templeton’s head of innovation, noted a shift in institutional behavior toward tokenization that proves a growing recognition that blockchain infrastructure can deliver meaningful advantages, including collateral that stays productive while deployed.
“These capabilities vastly change how financial products work in a way that legacy systems simply cannot support,” Kaul added. “BENJI’s success over these past five years, including 140 percent investor growth, points to a broader shift in how the market is recognizing its value and potential to reshape how capital flows.”
Denelle Dixon, Stellar Development Foundation’s CEO, wrote: “BENJI’s success has led the way for many other institutions to bring assets and products onchain. Franklin Templeton had the vision to launch BENJI five years ago, and the Stellar network’s infrastructure made it a reality. The per-transaction cost reductions, intraday yield and real-time transfers you see with BENJI on Stellar just make too much business sense for institutions to ignore.”
A flight to safety amidst DeFi instability
This milestone occurred just 10 days after Kelp DAO suffered the largest DeFi exploit of the year. On April 19, North Korean hackers created fake cross-chain messages, tricking the bridge into releasing 116,500 rsETH, worth US$293 million, to attacker wallets.
Kelp DAO hackers then swapped the stolen rsETH tokens into more common ETH and WETH on the Ethereum and Arbitrum networks to make the funds easier to move and spend. They used those tokens as collateral to borrow an additional US$236 million in WETH from lending platforms Aave V3 and Compound, greatly increasing their total theft.
The event triggered US$292 million in liquidations and billions in withdrawals from lending platforms.
Amidst native DeFi instability, data shared with the Investing News Network showed that BENJI still recorded roughly US$30 million in inflows between April 19 and April 30.
Institutional migration to tokenized deposits
The RWA.io State of RWA Tokenization in 2026 report provides several key findings suggesting that Franklin Templeton’s fund is not just an isolated success but a leading indicator of the modernization of the financial system through tokenization.
While the broader digital asset sector has been plagued by bridge exploits and DeFi hacks, institutional interest has not cooled; instead, it has migrated toward the security of the regulated banking perimeter. Unlike the high-risk bridge protocols, native tokenized products like BENJI and bank-issued deposits eliminate intermediary risk by acting as a direct, regulated link between the investor and the asset.
The report determined that 87 percent of financial institutions were exploring tokenization and tokenized deposits, citing major global banks like JPMorgan Chase & Co. (NYSE:JPM), BNY (NYSE:BK), Citi (NYSE:C) and HSBC (NYSE:HSBC), which have moved beyond experimentation into live production environments serving institutional clients.
In mid-2026, these efforts have scaled into major commercial operations, with J.P. Morgan and Citi now processing billions in daily transactions and HSBC and Goldman Sachs (NYSE:GS) transitioning their platforms into global utilities that support everything from digital government bonds to real-time gold trading.
This flight to regulated safety is driven by the fact that tokenized deposits inherit the foundational protections of the traditional banking system, such as FDIC insurance and established AML/KYC frameworks, which are absent in many permissionless protocols.
Furthermore, large-scale initiatives like Project Agorá, which involves over 40 institutions and seven central banks, as well as the mBridge platform, are actively testing tokenized commercial and central bank money to eliminate the so-called bridge risk that has historically made cross-border digital transfers vulnerable.
By integrating money and assets onto a single, unified ledger, these platforms remove the need for third-party bridges, which are vulnerable to exploits.
This vulnerability was highlighted on May 6 when the liquidity provider TrustedVolumes was hit by an ongoing exploit that drained nearly US$6.7 million, proving that even when major aggregators remain secure, investors are still exposed to hidden risks from the unvetted third-party middlemen that power decentralized markets.
The bottom line
The authors suggest that the potential for tokenized deposits is far larger than the US$500 billion the stablecoin market is projected to reach. This is because while stablecoins serve as a specialized digital payment instrument, tokenized deposits represent an upgrade to the foundational money supply, potentially tapping into a global customer deposit base that reached US$103 trillion in 2024.
BENJI’s five-year milestone serves as a proof point for the maturation of tokenized finance, demonstrating that blockchain infrastructure coupled with strong guardrails can provide tangible advantages.
As the financial system continues to modernize, the potential for tokenization to upgrade the global money supply represents a massive market opportunity.
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Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
