- The initiative is expected to bring cryptocurrencies to the mainstream
- The fund itself is not likely to invest in cryptocurrencies
- Heavyweights in American finance are entering the crypto space
Investment firm Franklin Templeton wants to use digital currencies as the choice of investment tool in a new fund. The initiative is likely to bring cryptocurrencies in general and Stellar in particular to the mainstream.
Fully Collateralized By Government Securities
The global investment fund that controls at least $700 billion in assets filed a preliminary prospectus with the United States’ Securities and Exchange Commission (SEC) regarding a money market fund whose shares will be tokenized on the Stellar network. As per the document, the fund will invest some 99.5% of the assets it manages in government securities, cash, and repurchase agreements fully collateralized by government securities or cash even though the fund is not likely to invest in cryptocurrencies.
The prospectus states that ownership of the shares will be exercised through the tokens on the Stellar network since a key factor in the overall positive performance of the fund itself is transparency. Investors will be able to perform their various investment transactions through mobile applications to be able to invest on the go. In a statement shared with a crypto news outlet, the fund stated that Franklin Templeton:
“Believes that blockchain technologies have the possibility to knit traditional asset management products and services closer to transactional payments […] a registered money market fund that is backed by hard assets and registered with the SEC under the Investment Company Act of 1940, with its shares existing as native digital assets on a blockchain and held in a digital wallet, can be an ideal stable digital asset to be used in the new economy.”
Beginning To Enter the Crypto Space
Franklin Resources Inc. was founded in New York in 1947 and together with its subsidiaries is referred to as Franklin Templeton Investments. The firm is the 32nd largest mutual fund in the world and the move is expected to bring cryptocurrencies in the grand scheme of things.
The move is also expected to put pressure on the US SEC who has been giving crypto projects a hard time besides putting the American government under pressure as the heavyweights in American finance are entering the crypto space. The filing also shows how creative genius can be applied to the global finance business ecosystem. With the right mix, the fund can bring on the rapid change in the crypto space which we have all been looking for.
