Institutional Investors Get 24/7 Yield with Tokenized Money Market Funds

DBS, Franklin Templeton, and Ripple have announced a partnership to develop innovative trading and lending solutions for institutional and accredited investors, leveraging tokenized money market funds and Ripple’s stablecoin, Ripple USD (RLUSD). The collaboration, formalized through a memorandum of understanding, aims to enhance portfolio management and liquidity in the digital asset space. Franklin Templeton’s tokenized money market fund, sgBENJI, will be listed alongside RLUSD on DBS Digital Exchange (DDEx), enabling investors to trade between the two assets quickly and efficiently.

The partnership combines DBS’s leadership in digital banking, Franklin Templeton’s expertise in asset management, and Ripple’s blockchain infrastructure to offer institutional investors more flexibility in navigating volatile market conditions. sgBENJI tokens represent Franklin Templeton’s U.S. Dollar Short-Term Money Market Fund and provide investors with exposure to a stable, yield-generating asset that can be traded 24/7. This offering is designed to address the limitations of traditional money market fund trading, which is typically limited to market hours and requires longer settlement times.

Looking ahead, DBS is exploring ways to expand the utility of sgBENJI by enabling its use as collateral for credit. This could allow investors to secure funding through repurchase agreements (repos) with DBS or third-party platforms, with DBS acting as the collateral custodian. The move is intended to broaden liquidity access while ensuring the security of client assets. The tokenization of money market funds on the XRP Ledger, selected for its speed, efficiency, and low transaction costs, is expected to facilitate high-volume, low-latency trades, aligning with the needs of institutional investors.

Franklin Templeton chose the XRP Ledger for tokenizing sgBENJI to enhance interoperability across blockchain networks, allowing broader access to different market participants. The XRP Ledger’s performance characteristics make it particularly suitable for tokenized money market funds, which require rapid settlement and high throughput. This decision also underscores the growing role of public blockchains in institutional finance and expands the ecosystem for tokenized securities.

The partnership comes at a time of heightened interest in digital assets among institutional investors. A recent survey by EY-Parthenon and Coinbase found that 87% of institutional investors expect to allocate to digital assets in 2025. By providing a regulated, on-chain solution, the collaboration addresses key challenges such as liquidity, transparency, and operational efficiency. The initiative also reflects broader trends in the maturation of the digital asset market, with traditional financial institutions increasingly integrating blockchain-based solutions into their offerings.

Ripple’s Nigel Khakoo described the partnership as a “game-changer,” emphasizing the value of having a unified ecosystem where investors can seamlessly switch between stablecoins and yield-bearing assets. The collaboration aligns with Ripple’s strategy to build infrastructure that supports real-world asset (RWA) tokenization, with the XRP Ledger already supporting a growing number of RWA tokenized products. The XRP Ledger’s expanding utility in institutional finance is further evidenced by its growing market cap and adoption of stablecoins like RLUSD.