$700B Asset Manager Wants to Use Stellar Blockchain for a U.S. Government Money Fund

Siamak Masnavi

On Tuesday (September 3), Franklin Templeton, one of the world's largest asset managers with total assets under management (AUM) of almost $700 billion, filed a preliminary prospectus with the U.S. Securities and Exchange Commission (SEC) for a new U.S. Government money market fund that will record the ownership of the fund's shares on the Stellar blockchain.

Here are some details about this proposed new fund:

  • The fund aims to "maintain a stable $1.00 share price" and to " provide investors with as high a level of current income as is consistent with the preservation of shareholders’ capital and liquidity."
  • The fund will invest "at least 99.5% of its total assets in Government securities, cash and repurchase agreements collateralized fully by Government securities or cash."
  • Although the fund will not invest in any cryptocurrencies, it will have blockchain-based shares. What this means is that although the fund's transfer agent will "maintain the official record of share ownership in book-entry form," share ownership "will also be recorded on the Stellar network."

The prospectus points out that "in the event of a conflict between the blockchain record and the record held by the transfer agent, the transfer agent’s record will be determinative." Such a discrepancy could "result in a delay of the processing of a purchase and redemption order."

And finally, Franklin Templeton warns that using distributed ledger technology (DLT) is "untested for mutual funds."

It is possible to purchase/redeem the funds's shares via a mobile app (available for both iOS and Android). The minimum initial purchase is $20 (for most accounts), but there is minimum investment requirement for further purchases of shares.

On August 21, Coindesk reported that Securitize, a "platform for the issuance and management of digital securities", had announced that it had registered as a transfer agent with the SEC, which means that it can now "act as the official keeper of records about changes of ownership in securities."

Carlos Domingo, Co-Founder and CEO of Securitize, told Coindesk:

We can increase the amount of securities issued on the blockchain and give comfort to people that this is a regulated space. The SEC has also started approving other types of exempted securities like Reg A+ and down the road those people will need transfer agents.


Featured Image Courtesy of Franklin Templeton Investments

Blockchain Is Well-Positioned to Help the Unbanked, OKEx Executive Says

Lennix Lai, OKEx’s Financial Markets Director, has recently made two presentations in Davos, where the 50th World Economic Forum (WEF) Annual Meeting is taking place, to spread the word about blockchain technology.

In his two presentations – made at the Russia House 2020 and EmTech Investment Meeting 2020 events – Lai argued that even though there are highly developed countries throughout the world, over 2 billion people are still being excluded from the traditional financial services over the operational costs associated with setting up branches in underdeveloped areas.

Lai noted that “unbankedness” is one of the “biggest hurdles in human wellbeing” and a great opportunity for the blockchain and fintech sector to make a difference in the world by helping those left behind by the traditional financial sector get access to financial services that could boost their living standards. At Russia House 2020, Lai said:

Blockchain and cryptocurrencies appear to be a solution to the problem by providing a digital, decentralized financial system that can work mutually-beneficially with traditional markets to substantially lower the operational costs and serve the areas traditional banking cannot cover.

Lai added that OKEx is committed to “bringing a robust and trustable environment to cater to crypto users.” The cryptocurrency exchange, he added at the EmTech Investment Meeting 2020 talk, sees global regulators a start endorsing the space in the future, and the volatility of BTC dropping.

This would make the flagship cryptocurrency a favorable alternative asset for mainstream finance. He also mentioned the growing decentralized finance space, which “reflects that people are starting to brace a free, open, permission-less financial system.”

The options, futures and spot markets OKEx offers, Lai said, let cryptocurrency users manage the price fluctuations in the space, and 2020 will see the exchange continue its efforts on stablecoins, its OKEx wallet, and derivatives products.

He concluded his presentation at the EmTech Investment Meeting 2020 saying OKEx believes “blockchain can achieve an inclusive sustainable development as well as financial inclusion for all, banked and unbanked.”

Featured image via Unsplash.