Lead

On Tuesday, Payward Inc., the parent of crypto exchange Kraken, announced a partnership with asset manager Franklin Templeton to tokenise the firm’s BENJI money‑market fund and launch actively managed on‑chain yield strategies. In the same week, Bitwise Asset Management introduced the Hyperliquid etf (ticker BHYP), giving investors direct exposure to the native token of the on‑chain trading platform Hyperliquid. Together, the moves signal a growing appetite for regulated, blockchain‑based investment products among institutional clients.

Background

Tokenised investment products convert traditional securities into digital tokens that can be traded on blockchain infrastructure. Franklin Templeton has been a pioneer in this space, with BENJI among the first tokenised money‑market funds to gain traction. Kraken, one of the largest crypto exchanges, has been expanding beyond spot trading through its xStocks framework, which has processed over $30 billion in trading volume since its 2025 launch. Hyperliquid is a decentralized exchange that commands roughly 60 % of global on‑chain perpetual DEX open interest and processes about 200,000 orders per second, according to defiLlama data. Bitwise’s Hyperliquid ETF is the first to use its in‑house staking infrastructure rather than a third‑party provider.

What Happened

Kraken will integrate Franklin Templeton’s BENJI money‑market fund as a collateral asset and cash‑management tool for institutional clients. Traders on Kraken will be able to park cash in the tokenised fund and use it as collateral, potentially earning yield rather than holding idle dollars. The partnership also covers the development of actively managed on‑chain yield products under Franklin Templeton’s brand, delivered through Kraken’s blockchain infrastructure. The collaboration will leverage Kraken’s xStocks framework, which has already facilitated tokenised equity trading.

Separately, Bitwise announced the launch of the Hyperliquid ETF (ticker BHYP) on NYSE Arca. The fund offers 100 % direct exposure to spot HYPE tokens and aims to generate additional HYPE through staking. The prospectus states a sponsor fee of 0.34 %, which Bitwise will waive for one month on the first $500 million in assets. The ETF’s launch follows 21Shares’ earlier debut of a Hyperliquid ETF, which has processed more than $4.47 million in trading volume and posted $2.52 million in net inflows since launch. On the day after the Bitwise launch, HYPE rose more than 15 % to near $45, partly in response to the new ETF and Coinbase’s announcement that it will become the official treasury deployer of USDC on Hyperliquid.

Market & Industry Implications

The Kraken‑Franklin Templeton partnership demonstrates how traditional asset managers can leverage blockchain to offer regulated, tokenised products that provide yield and liquidity to institutional clients. By using BENJI as collateral, Kraken could reduce the cost of capital for traders and potentially shift the economics of institutional crypto trading. The move also adds institutional credibility to Kraken’s expanding product suite beyond spot trading.

Bitwise’s Hyperliquid ETF adds to the growing number of regulated vehicles that give investors exposure to on‑chain tokens. The use of in‑house staking infrastructure may reduce counterparty risk compared to third‑party staking providers. The ETF’s launch, alongside 21Shares’ earlier product, indicates that institutional demand for Hyperliquid‑linked exposure is accelerating, as evidenced by the early trading volume and net inflows reported for the 21Shares fund.

Both developments reflect a broader industry trend of integrating traditional financial structures with blockchain technology. They also show that regulators are allowing regulated products that use on‑chain assets, provided they adhere to securities law and banking regulations. The focus on select regulated jurisdictions for retail access further underscores the cautious approach both firms are taking.

What to Watch

  • Kraken’s rollout of the BENJI tokenised fund as collateral for institutional clients, including any updates on collateral acceptance and yield performance.
  • The performance and asset accumulation of Bitwise’s Hyperliquid ETF (BHYP) in the first weeks of trading, particularly its net inflows and trading volume.
  • Any regulatory announcements regarding the use of tokenised money‑market funds as collateral on exchanges.
  • Coinbase’s role as the official treasury deployer of USDC on Hyperliquid and its impact on stablecoin liquidity within the platform.