Franklin Templeton, named after the American founding father Benjamin Franklin, is planning to launch a brand new cryptocurrency fund.
According to sources familiar with the matter, the fund will invest in a range of digital assets called “altcoins” beyond Bitcoin and Ethereum, a move rare among traditional asset management companies. The new fund will target institutional investors and will be offered in the form of a private fund, bypassing the regulatory hurdles faced by ETFs.
With $1.6 trillion in assets under management, Franklin Templeton entered the digital asset space in 2018. In 2021, the company launched a blockchain-based money market fund, three years ahead of similar funds from asset management giant BlackRock.
However, many asset management companies remain cautious about cryptocurrency investments due to legal and regulatory uncertainties.
In January this year, the U.S. Securities and Exchange Commission approved ETFs directly holding Bitcoin, allowing individual investors to invest in Bitcoin as easily as buying stocks. In the same month, Franklin Templeton and other large fund companies rushed to launch Bitcoin ETFs, with total assets reaching around $60 billion. In May, the SEC took the first step towards approving Ethereum ETFs, including Franklin’s application.
Franklin Templeton’s new fund will not face the regulatory hurdles of ETFs as it is not targeting retail investors. The fund is expected to invest actively or passively in cryptocurrencies, with fund managers selecting tokens for investment. Additionally, the fund may offer staking rewards, allowing investors to earn rewards by staking their assets to validate blockchain transactions.
Currently, asset management companies specializing in cryptocurrencies such as Grayscale and Galaxy Digital have launched token funds including Solana, Avalanche, and XRP.
Previously, Franklin Templeton launched private funds for affluent investors and provided a range of independent management accounts for cryptocurrency tokens through Eaglebrook Advisors.
Furthermore, the company is actively expanding its digital asset business outside the United States. In April this year, Franklin Templeton established a joint venture in the United Arab Emirates to explore the development of an “income coin” similar to stablecoins but with interest-bearing capabilities.
CEO Jenny Johnson stated that more people will have investment opportunities through blockchain in the future and revealed that the company is considering tokenized investment opportunities for traditional ETFs in the market to make them easier for investors to manage and use.
