Kraken Parent Payward and Franklin Templeton to Tokenize Funds

Payward Inc., the parent of crypto exchange Kraken, and Franklin Templeton agreed on May 12, 2026 to develop tokenized yield and equity products and to integrate Franklin Templeton’s BENJI token suite into Kraken’s xStocks infrastructure.

Under the agreement, Franklin Templeton will convert selected actively managed strategies into programmable, tradable tokens while Payward will list and distribute those tokens on Kraken’s xStocks. The firms said they will initially target institutional customers and expand access to retail users only where local regulation allows.

Kraken’s xStocks framework has handled more than $30 billion in trading volume since its 2025 launch and supports 1:1 tokenized representations of U.S. stocks and ETFs for eligible non-U.S. clients. Payward will add BENJI tokens-digital representations of shares in the Franklin Onchain U.S. Government Money Fund and related vehicles-so institutional users can use them as collateral or to generate yield in digital markets.

The companies said tokenized products will be issued and distributed by Payward, and Franklin Templeton will manage the underlying investment strategies. The announcement said availability will vary by jurisdiction and that Franklin Templeton does not issue or endorse third-party tokenization platforms.

Franklin Templeton manages about $1.74 trillion in assets and has been integrating blockchain technology since 2018. The firm launched FOBXX, the first U.S.-registered mutual fund to record share ownership on a public blockchain, in April 2021 and has made that fund available on networks including Stellar, Solana, Base, Polygon, Aptos, Arbitrum and Avalanche. In March 2026 Franklin Templeton worked with Ondo Finance to tokenize five ETFs for onchain distribution and 24/7 trading. In April 2026 the firm formed a Franklin Crypto business through the acquisition of 250 Digital, with part of that transaction settled using BENJI tokens.

Payward has pursued token partnerships and in 2026 announced work with Nasdaq to design equity tokens that support automated corporate actions, proxy voting and dividend distribution. The firms said the new collaboration is part of a broader industry effort to connect regulated traditional-finance products with blockchain features such as round-the-clock availability and composability with decentralized finance tools.

The announcement included risk disclosures citing regulatory uncertainty, blockchain security vulnerabilities, potential pricing and settlement issues, and operational risks. Both Payward and Franklin Templeton participate in DTCC tokenization working groups as they expand onchain offerings for institutional clients.

Arjun Sethi, co-CEO of Payward and Kraken, described the collaboration as creating “a new class of products” that pair long-established managers with programmable digital infrastructure. Sandy Kaul, head of digital assets and innovation at Franklin Templeton, noted the firms aim to expand BENJI’s practical use and to serve both digital-native and institutional customers.