Over the past 18 months, Franklin Templeton’s on-chain money market fund has quietly grown from $300 million to over $1.2 billion in assets under management. That’s a 4x expansion in a sideways crypto market — but the real signal isn’t the number. It’s the infrastructure shift. The fund, originally launched on Stellar, is now exploring Canton Network, a privacy-preserving distributed ledger designed for institutional settlement. This migration, hinted at in a recent interview with digital asset head Roger Bayston, marks a subtle but profound pivot: the world’s largest asset managers are no longer just tokenizing assets — they are choosing their chains carefully, and in doing so, reshaping the very philosophy of what tokenization means for the rest of us.
Context: The Quiet Giant of Tokenization
Franklin Templeton isn’t a flashy crypto native. It’s a 75-year-old investment behemoth managing over $1.5 trillion. In 2021, it launched the ONCHAIN U.S. Government Money Market Fund (ticker: BENJI), one of the first SEC-registered mutual funds to use a public blockchain for transaction recording and share ownership. The choice of Stellar — an open, low-cost payment network — was deliberate: Stellar offered speed, low fees, and a built-in decentralized exchange, making it ideal for a fund that needed to process subscriptions and redemptions efficiently.
Yet fast forward to 2025, and the narrative has shifted. Bayston’s remarks about "exploring Canton" suggest that the fund is outgrowing Stellar’s public transparency model. Canton, built by Digital Asset, is a permissioned network that emphasizes data privacy and selective disclosure. It’s not a public chain; it’s a federated settlement layer for institutions. For Franklin Templeton, moving from Stellar to Canton is not just a tech upgrade — it’s a strategic reorientation toward privacy, compliance, and institutional interoperability.
But here’s the paradox: the same institutions that once praised public blockchains for their transparency are now retreating into private corridors. What does that mean for the original vision of decentralized, permissionless value transfer? That’s the tension we need to unpack — not with tribal outrage, but with the curiosity of an educator.
Core: Technology, Values, and the Hidden Trade-Offs
The Technical Path: Stellar vs. Canton
Stellar is an open blockchain. Every transaction is visible to anyone. For a money market fund, this creates a challenge: fund holdings, investor activity, and redemption requests are all exposed. While Stellar uses stellar-core and the Stellar Consensus Protocol to ensure finality, the visibility means that other market participants could front-run large redemptions or reverse-engineer portfolio movements. This is not a bug; it’s a feature of public blockchains. But for a regulated fund that values investor privacy, it’s a liability.
Canton Network, on the other hand, uses a "smart contract privacy" model. Each party sees only the data they are authorized to see, while the network of nodes reaches consensus on the validity of state changes without revealing the entire state. This is closer to traditional financial settlement — banks see their own trades, not everyone else’s. The trade-off: Canton is permissioned, meaning only approved institutions can run nodes and validate transactions. The price of privacy is permission.
In my audit and educational work over the past eight years, I’ve seen this trade-off play out repeatedly. When I taught DeFi safety workshops during the 2020 summer frenzy, participants often assumed that "on-chain" automatically meant "trustless." It doesn’t. Trustlessness requires open participation. By moving to Canton, Franklin Templeton is sacrificing trustlessness for regulatory familiarity and client confidentiality. This is a completely rational decision for an asset manager — but it’s a departure from the ethos many of us fell in love with.
The technical details are sparse in the original article, but the direction is clear. From a consensus perspective, Stellar uses a federated Byzantine agreement (FBA) that is permissionless to join (though with a quota of quorum slices). Canton uses a BFT-based consensus run by known parties. Both are safe, but they optimize for different values: Stellar for openness, Canton for privacy. The real innovation here isn’t in the code — it’s in the decision framework. Franklin Templeton is signaling that institutional tokenization will follow a multi-chain strategy, using public chains for distribution and private chains for core settlement.
The Values Lens: Who Does Tokenization Serve?
I’ve always believed that community is not a user base; it is a shared soul. When I started ChainLogic in 2017, my mission was to demystify blockchain for people who felt excluded by the technical jargon. Back then, the promise was clear: an open financial system where anyone could participate without asking permission. The ONCHAIN fund, by issuing tokens on Stellar, allowed anyone with a Stellar wallet to hold shares in a U.S. government money market fund. That was revolutionary: a trillion-dollar asset manager opening its doors to retail investors without a bank account.
But the move to Canton raises uncomfortable questions. If the core settlement moves to a permissioned network, will retail investors still be able to redeem directly? Or will they become second-class participants, served through intermediaries while institutions enjoy the privacy benefits? Bayston’s comments don’t clarify this, but the pattern is familiar. Institutions have always preferred walled gardens. We build not for the token, but for the tribe — and the tribe is now being split into insiders and outsiders.
We need to examine this through a risk-first educational framework. When I led the DeFi Safety workshops in 2020, I taught participants to ask: "Who controls the keys? Who can pause the contract? Who sees my data?" For the Canton-based version of the fund, the answers shift: trusted nodes control the consensus, the network operators can potentially pause or filter transactions, and data visibility is determined by governance. These are not inherently bad — they are just different. But they must be communicated transparently so that token holders understand the security model they are trusting.
The Competitive Landscape: BlackRock, JPMorgan, and the Race for RWA
Franklin Templeton is not alone. BlackRock’s BUIDL fund, launched in partnership with Securitize, runs on Ethereum (as well as several other chains via tokenization partners). JPMorgan’s Onyx operates a private version of Quorum. Each major player is choosing its own blockchain hygiene. But the key differentiator is not the chain — it’s the philosophy of inclusion.
Franklin Templeton’s Stellar-to-Canton arc illustrates a broader institutional preference for controlled privacy. This could lead to a bifurcated market: public chains for speculative assets (NFTs, memecoins, etc.) and permissioned chains for "real" financial assets. If that happens, the original promise of a single, unifying global ledger is dead. Instead, we get a two-tier system: one for the people, one for the powerful.)
Is that necessarily bad? Not if it brings stability and protection. My own experience in the 2021 NFT Community Building Crisis taught me that when speculation dominates utility, real people get hurt. Institutions can bring liquidity, regulation, and recourse. But they can also bring censorship, gatekeeping, and concentration of control. The challenge is to design tokenization systems that allow the best of both worlds: institutional efficiency with user sovereignty.
Contrarian Angle: The Blind Spots of Institutional Tokenization
Every hero narrative has its shadow. The article celebrating Franklin Templeton’s adoption omits several critical risks.
First, regulatory creep. Once a network like Canton becomes the home for a major money market fund, regulators (SEC, CFTC, FSOC) will have an incentive to demand access to data, enforce freezes, or even require the network to comply with sanctions — which could mean blocking addresses or reversing transactions. Permissioned networks are more regulator-friendly, but that friendliness can become a sword. We saw this with Telegram’s TON, which was shut down by the SEC even before launch. Canton’s nodes are likely operated by large banks and asset managers; they can be compelled by law to act as gatekeepers.
Second, the illusion of choice. As more RWA (Real World Assets) move to private networks, retail investors may find themselves locked out of the most liquid, highest-quality assets. Public chains will become playgrounds for native crypto assets, while the "safe" assets are siloed inside institutions. This is the opposite of financial inclusion.
Third, the loss of composability. On Stellar, the ONCHAIN token can be swapped, lent, or used as collateral in decentralized exchanges automatically. On Canton, unless the network explicitly allows smart contract interoperability (which is currently limited), the token becomes a walled garden fruit. Composability is the magic of DeFi — without it, tokenization is just a database.
Fourth, governance opacity. Canton is governed by a consortium of institutions. Decisions about upgrades, parameter changes, and admission of new nodes are made by a small group. This is not a DAO; it’s a corporate board. Trust me, I’ve been inside enough institutional circles to know that "governance" is often a euphemism for "the CEO’s decision." The article gives no details about how the network’s governance will function, nor how token holders can have a voice.
Finally, the risk of technical debt. Moving from Stellar to Canton is not trivial. It may require rewriting smart contracts, migrating state, and updating legal documents. The article doesn’t mention any audits, tests, or timelines. Institutions often underestimate the complexity of blockchain migrations. I’ve seen projects lose millions due to bridge exploits or state sync errors. The "from Stellar to Canton" narrative could become a cautionary tale if not executed with care.
Takeaway: The Need for Educational Vigilance
The adoption of tokenization by Franklin Templeton is a testament to the maturation of blockchain technology. But maturation does not mean the end of values — it means the beginning of a more nuanced conversation. As an educator and evangelist, I see this as a call to action: we must continue to educate both institutions and retail investors about the trade-offs, the governance structures, and the hidden risks. We build not for the token, but for the tribe.
In my 2022 post-crash webinar series, I emphasized that the strongest communities are those that understand their own vulnerabilities. The same applies here. Franklin Templeton’s shift to Canton is not a victory or a defeat — it is a choice. Our job is to make sure every participant, from a first-time buyer of the ONCHAIN fund to a seasoned asset manager, knows exactly what they are choosing.
The future of tokenization should not be a zero-sum game between privacy and permissionlessness. It should be a layered ecosystem where each asset finds the right home. But that requires transparency from the issuers and literacy from the users. I’ll be watching the Canton deployment closely, and I hope the article’s next iteration will include the technical details and risk disclosures that every informed investor deserves.
As I always tell my students: "Trust is the only real asset." Franklin Templeton has earned trust by being an early mover. Now it must earn trust by being an honest mover — transparent about the trade-offs and committed to serving the whole tribe, not just the insiders.