The Block, a "research, analysis and news brand in the digital asset space," published a brief entitled, "Franklin Templeton proposes tokenized government money market fund on Stellar Network." It explains, "Franklin Templeton Investments, a global investment fund with nearly $700B in assets under management, has filed a preliminary prospectus with the SEC for a government money market fund whose shares will be tokenized on the Stellar network." We quote from this article, and from the full Form N-1A filing for Franklin Blockchain Enabled U.S. Government Money Fund, below.
Their article tells us, "In a statement shared with The Block, Franklin Templeton states that it 'believes that blockchain technologies have the possibility to knit traditional asset management products and services closer to transactional payments' and that '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.'"
It adds, "As part of the creation of the fund, Franklin Templeton will also develop a mobile app which will be available in the Apple App Store and Google Play. This app enables investors to purchase and redeem the tokenized shares on the government money market fund directly from the firm and also monitor the balance of the shares on the public Stellar blockchain."
The new Form N-1A (new fund) filing for the Franklin Blockchain Enabled US Government Money Fund says, "The Fund invests at least 99.5% of its total assets in Government securities, cash and repurchase agreements collateralized fully by Government securities or cash.... The Fund intends to be a 'Government money market fund,' as such term is defined in or interpreted under Rule 2a-7 under the Investment Company Act of1940. Shareholders will be given at least 60 days' advance notice of any change to the 99.5% policy."
It explains, "The Fund invests in: U.S. government securities which may include fixed, floating and variable rate securities. Repurchase agreements.... The Fund only buys securities that the investment manager determines present minimal credit risks. The Fund maintains a dollar-weighted average portfolio maturity of 60 calendar days or less, maintains a dollar-weighted average life for its portfolio of 120 calendar days or less, and only buys securities that mature in 397 calendar days or less."
The filing continues, "Although the Fund's transfer agent will maintain the official record of share ownership in book-entry form, the ownership of the Fund's shares will also be recorded on the Stellar network, an electronic distributed ledger that is secured using cryptography (referred to as a 'blockchain'). A blockchain contains a digital record or ledger of transaction data that is permanently recorded in files called 'blocks.' Blockchain networks are based upon software source code that establishes and governs their respective cryptographic systems for verifying transactions. The Fund will not invest in any cryptocurrencies (referred to as, among other things, virtual currencies)."
It states, "At this time, shares of the Fund are not currently available for purchase, sale or transfer from one shareholder to another shareholder (or potential shareholder) ('peer-to-peer') on the blockchain or in any secondary trading market. The Fund's investment manager believes that blockchain-based shares will provide increased transparency to Fund shareholders and may, in the future, permit reduced settlement times and provide other benefits to Fund shareholders."
Finally, Franklin says, "Users of the Stellar network must pay transaction fees (in the form of 'Stellar Lumens,' the native digital asset for the operation of Stellar) to the Stellar network in order to validate a transaction. Such transaction fees are intended to protect the Stellar ledger from frivolous or malicious computational tasks. These transaction fees will be the responsibility of the investment manager or its affiliates or a third party.... Upon the creation of an account through the App, a blockchain wallet and a corresponding public and private key pair will be created for each investor. A key pair consists of a public key and its corresponding private key, both of which are lengthy numerical codes, derived together and possessing a unique relationship."
In other news, Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics and summary Tuesday. Our weekly holdings track a shifting subset of our monthly Portfolio Holdings collection, and the latest cut (with data as of August 30) includes Holdings information from 48 money funds (down from 91 last week), representing $1.012 trillion (down from $1.957 trillion last week) of the $3.504 trillion (28.9%) in total money fund assets tracked by Crane Data.
Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Repurchase Agreements (Repo) totaling $410.7 billion (down from $800.8 billion last week), or 40.6%, Treasury debt totaling $290.3 billion (down from $560.5 billion) or 28.7%, and Government Agency securities totaling $173.8 billion (down from $303.7 billion), or 17.2%. Commercial Paper (CP) totaled $54.2 billion (down from $100.0 billion), or 5.4%, and Certificates of Deposit (CDs) totaled $45.8 billion (down from $92.9 billion), or 4.5%. A total of $22.3 billion or 2.2%, was listed in the Other category (primarily Time Deposits), and VRDNs accounted for $15.2 billion, or 1.5%.
The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $290.3 billion (28.7% of total holdings), Federal Home Loan Bank with $118.0B (11.7%), Fixed Income Clearing Co with $59.3B (5.9%), BNP Paribas with $36.2 billion (3.6%), Federal Farm Credit Bank with $31.9B (3.1%), Barclays PLC with $29.7B (2.9%), RBC with $28.4B (2.8%), Societe Generale with $23.0B (2.3%), JP Morgan with $22.2B (2.2%) and Credit Agricole with $21.0B (2.1%).
The Ten Largest Funds tracked in our latest Weekly include: Fidelity Inv MM: Govt Port ($134.6B), BlackRock Lq FedFund ($99.9B), Wells Fargo Govt MMkt ($82.0B), BlackRock Lq T-Fund ($77.7B), Fidelity Inv MM: MMkt Port ($66.6B), Morgan Stanley Inst Liq Govt ($61.8B), Dreyfus Govt Cash Mgmt ($53.7B), State Street Inst US Govt ($52.1B), BlackRock Lq Trs Trust ($38.6B) and Dreyfus Treas Sec Cash Mg ($31.1B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary, or our Bond Fund Portfolio Holdings data series.)
