Tokenized Funds Solve Yield Gap, Offering Stable Income for Institutional Investors

DBS Bank, Franklin Templeton, and Ripple have launched a partnership to integrate Web3 infrastructure with traditional financial systems, offering institutional investors access to tokenized money market funds and stablecoin-enabled lending solutions. The collaboration, formalized through a memorandum of understanding, leverages the XRP Ledger blockchain and Ripple’s RLUSD stablecoin to create a 24/7 trading and collateralization platform. This marks a significant step in the tokenization of financial assets, with Franklin Templeton’s Franklin Onchain U.S. Dollar Short-Term Money Market Fund tokenized as sgBENJI and listed on DBS Digital Exchange (DDEx) alongside RLUSD. Investors can now swap between the stablecoin and yield-generating tokens, enabling portfolio rebalancing during volatile periods while maintaining liquidityDBS and Franklin Templeton to launch trading and lending solutions powered by tokenised money market funds and Ripple’s RLUSD stablecoin^[1].

The partnership addresses a critical gap in digital asset management, where traditional investments like Bitcoin and Ether offer no yield and are subject to price swings. By tokenizing money market funds, which typically hold short-term, low-risk instruments like Treasuries, the initiative provides a stable, income-producing alternative. DBS clients can trade RLUSD for sgBENJI tokens within minutes, a process that traditionally takes days for conventional money market funds. This efficiency, combined with the ability to use sgBENJI as collateral for repo transactions, expands liquidity options for institutional investors. DBS plans to facilitate repo trades where clients can borrow funds against their sgBENJI holdings, either directly from the bank or via third-party platforms, with DBS acting as a custodianRipple Partners Trillion-Dollar Manager Franklin Templeton and …^[2].

Franklin Templeton’s tokenization of its fund on the XRP Ledger enhances interoperability across blockchain networks, a strategic move to strengthen the tokenized securities ecosystem. The XRP Ledger was selected for its low transaction costs, speed, and scalability—critical factors for managing high-volume, low-latency assets. This expansion aligns with Franklin Templeton’s broader blockchain strategy, which includes tokenizing assets on multiple chains to broaden accessibility. The firm’s Head of Digital Assets, Roger Bayston, emphasized that blockchain and tokenization “unlock powerful new use cases” for institutional finance, enabling real-time settlement and programmable liquidityXRP Ledger, Ripple News: DBS, Franklin Templeton and Ripple …^[3].

Ripple’s RLUSD stablecoin plays a central role in the partnership, serving as a bridge between traditional and digital markets. By pairing RLUSD with tokenized money market funds, the collaboration reduces friction in converting fiat to digital assets and vice versa. Ripple’s VP of Trading and Markets, Nigel Khakoo, described the initiative as a “game-changer,” noting that 2025 has seen a surge in traditional financial institutions adopting onchain solutions. The integration of regulated stablecoins and tokenized securities, he argued, enhances capital efficiency and meets institutional demands for trusted ecosystemsRiple, DBS, and Franklin Templeton Unveil $1.62 …^[4].

The partnership also reflects broader trends in institutional adoption of digital assets. A 2025 survey by EY-Parthenon and Coinbase found that 87% of institutional investors plan to allocate capital to digital assets this year, underscoring growing confidence in blockchain-based solutionsDBS, Franklin Templeton, Ripple to Launch …^[5]. DBS Digital Exchange CEO Lim Wee Kian highlighted that tokenized securities are no longer speculative but practical tools for modern markets, citing their role in improving liquidity and efficiency. The bank’s existing forays into tokenized structured notes on Ethereum further position it as a leader in Asia’s digital asset ecosystemApex 2025: A Turning Point for Institutional …^[6].

This initiative aligns with Singapore’s emergence as a hub for tokenized finance, supported by the Monetary Authority of Singapore’s Project Guardian trials. The collaboration adheres to anti-money laundering and investor protection regulations, setting a benchmark for compliance in the sector. As tokenized assets gain traction, the partnership between DBS, Franklin Templeton, and Ripple signals a shift toward hybrid financial models where Web2 infrastructure and Web3 innovation coexist to serve institutional needsRiple, DBS Bank, Franklin Templeton Tap XRP …^[7].