Franklin Templeton, a leading global asset manager, has introduced Hong Kong’s first tokenized money-market fund, marking a major step in the city’s effort to merge traditional finance with blockchain technology.
The fund, called the Franklin OnChain U.S. Government Money Fund, is registered in Luxembourg and backed by short-term U.S. Treasury securities. Each investor’s share in the fund is represented as a digital token recorded on the blockchain, allowing ownership and transfers to be tracked instantly and transparently.
The Hong Kong Monetary Authority (HKMA) has officially launched its Fintech 2023 Strategy at the Hong Kong FinTech Week 2025. In the official press release, the event marked a decade of fintech progress with over 40 initiatives to modernize the city’s financial infrastructure. It also aims to embed AI in finance, develop a tokenization ecosystem, and enhance sector-wide resilience.
The launch of the Franklin tokenized fund marks the first project under the HKMA’s fintech 2030 plan.
HKMA Chief Executive Eddie Yue described this as the beginning of Hong Kong’s “fintech 3.0” era, focused on building resilience and preparing for future innovation. Now ranked as the world’s top fintech hub with over 1,200 firms, the city expects sector revenue to exceed US$600 billion by 2032. The first project under the plan is expected to launch by the end of the year, enabling settlement of tokenized money-market funds.
Sandy Kaul, Head of Innovation at Franklin Templeton, said, “With growing interest in tokenized financial products, we look forward to collaborating with a wider range of distributors, including traditional institutions and Web3-native platforms, to accelerate the momentum of the tokenization revolution and further shape the future of investing.”
As part of its Fintech 2030 push, the HKMA is expanding its blockchain efforts globally.
According to a report from SCMP, Yue added, “Banks can use tokenized deposits to settle these funds, [and] regarding the settlement among banks, we would also like them to use the central bank digital currency for settlements.” He also said the HKMA is working with the central banks of Brazil and Thailand to use blockchain and tokenization to accelerate and make cross-border trade more accessible for small businesses.
Additionally, Franklin Templeton is working with HSBC and OSL Group, one of Hong Kong’s licensed virtual asset platforms, through the HKMA’s Project Ensemble, a sandbox testing environment for tokenized deposits and fund flows. HSBC said the collaboration could enable near-instant settlement between traditional and blockchain-based systems.
Globally, tokenization is surging. A report by Ripple and the Boston Consulting Group earlier this year estimated that the value of tokenized real-world assets could grow from about $36 billion today to $19 trillion by 2033.
The HKMA’s Fintech 2030 blueprint also lays out plans to strengthen cybersecurity, develop a unified AI infrastructure, and expand access to financial data. The authority said it will launch an AI strategy to promote responsible adoption across the banking sector and improve oversight through tools like the Responsible AI Toolkit and Project Noor, developed with the Bank for International Settlements.
Financial Secretary Paul Chan Mo-po emphasized that Hong Kong’s approach must balance innovation with investor protection and financial stability. “While we encourage innovation, we must also ensure its real-world applicability and resilience,” Chan said at the Hong Kong Fintech Week conference.
With projects like Franklin Templeton’s tokenized fund paving the way, Hong Kong is stepping into a new era of digital finance, where blockchain and AI work together to shape the city’s future as a global fintech hub.
