Franklin Templeton, Kraken Parent to Tokenize Investment Products

Franklin Templeton and Payward, the parent company of crypto exchange Kraken, announced Tuesday a partnership to develop tokenized equities, custody solutions for on-chain assets, actively managed yield products and institutional crypto liquidity through Kraken’s OTC and Prime services.

The firms noted they will explore launching tokenized versions of Franklin Templeton financial instruments, with a focus on yield products for institutional clients. Where appropriate, some tokenized products could be offered to Kraken’s broader user base. The companies said they will assess product designs and distribution plans but did not provide a timeline for any launches.

Kraken already offers tokenized equities through its xStocks feature, which the company reports has processed more than $30 billion in trading volume since launching last year. Arjun Sethi, co-CEO of Payward and Kraken, wrote that the partnership aims to build “a model of finance where the distinction between traditional assets and digital infrastructure no longer holds” and called the collaboration a way to create products that were not available a few years ago.

Payward has applied for a national trust company charter with the Office of the Comptroller of the Currency, a move the company states would expand its access to U.S. financial services.

Franklin Templeton already issues crypto-based exchange-traded funds that track assets such as bitcoin and XRP, and it offers BENJI, a tokenized version of its money market fund. The asset manager is also working with Ondo Finance on additional tokenized offerings.

Sandy Kaul, head of digital assets and innovation at Franklin Templeton, noted: “The focus should be on making on-chain assets more functional for the full range of market participants once they are there.”