Franklin Templeton and SWIFT push for always-on banking built directly on blockchains

Speakers at Consensus Hong Kong — including senior figures from Franklin Templeton, SWIFT and a custody specialist — set out a practical roadmap for moving tokenized funds and on‑chain bank liabilities from isolated pilots into production infrastructure. The core proposition is to issue familiar instruments natively on distributed ledgers so they can circulate, settle and be audited continuously, removing batch cutoffs and holiday delays that constrain conventional plumbing. Panelists proposed short‑duration money market funds as the first large‑scale test case because those instruments are standardized, widely held by cash managers and create a clear, recurring business case for lower reconciliation cost and faster cash rotation. SWIFT described an orchestration layer designed to let tokenized bank liabilities, CBDCs and regulated digital assets interoperate with existing bank‑balance‑sheet mechanics rather than forcing wholesale replacement of core systems. That approach aims to enable atomic delivery‑versus‑payment and continuous auditability while preserving prudential oversight and visible reserve placement. But the group was explicit that technical limitations remain a gate: sustained throughput, predictable latency and finality, and stronger transaction‑ordering primitives are required for institutional market‑making and to limit extractable‑value risks that currently encourage well‑capitalized middleware to capture execution rents. Those commercial dynamics are already producing concentration: sequencers, stablecoin issuers, custody providers and cross‑chain bridges are aggregating distribution and execution advantages, which raises lock‑in and systemic exposure concerns. Regulatory sequencing and pilot regimes — from the EU’s MiCA pathway to planned Hong Kong licensing and Singaporean pilots — are helping create routes to authorization, but uneven legal treatment of tokenized liabilities and accounting ambiguity remain the single biggest adoption barrier. Custody resilience, enterprise key management and embedded compliance tooling (KYC/AML matched to sub‑second settlement) were highlighted as prerequisites for institutional trust. Panelists envisaged a hybrid topology in which bank‑anchored tokenized deposits and ledger‑native fund shares coexist with decentralized primitives; intermediaries that can offer verifiable settlement, custody, compliance and interoperable rails are likely to retain roles. If the legal, technical and governance pieces align, tokenized short‑term instruments could compress settlement windows, lower servicing costs and mobilize illiquid capital into tradable markets; absent that convergence, the industry risks recreating today’s fragmentation and concentration in a new technical form. In short, the technology and business case are maturing, but broader systemic change will follow only after coordinated upgrades in infrastructure, standards and supervision.