Source: Cointelegraph
Original: “Franklin Trust Introduces Blockchain Technology to Generate Returns on Idle Payroll Funds”
Hybrid crypto payroll service provider Franklin has recently launched an innovative solution aimed at transforming idle payroll funds into revenue opportunities. According to an exclusive statement provided to Cointelegraph by the company, this new service, named "Payroll Treasury Yield," utilizes blockchain lending protocols to help businesses generate returns from previously idle payroll funds.
The solution integrates the decentralized finance (DeFi) lending platform Summer.fi, allowing companies to deposit payroll reserves denominated in stablecoins into a smart contract-based lending pool. These funds will be lent to rigorously vetted borrowers, enabling businesses to earn returns while retaining the right to use their funds. Throughout the entire process, companies maintain complete custody of their funds, and all smart contracts used are subject to security audits to mitigate risks.
Megan Knab, founder and CEO of Franklin, pointed out to Cointelegraph, "We are addressing a dual pain point." For companies that have incorporated cryptocurrency into their balance sheets, Franklin helps them optimize operations using these assets; "and for the broader market, we are empowering future business models—enabling smarter, more immediate, and more global capital flows," Knab added.
An Alternative to T-Bills
Franklin stated that its newly launched product serves as an alternative to traditional government bond instruments (such as auto-rollover accounts or Treasury bills), which typically involve operational complexities and limited returns.
Additionally, this product differs from "Earned Wage Access" (EWA) platforms, which allow employees to withdraw earned wages before payday but often involve new debt and associated costs.
Knab stated, "In the next decade, traditional payment methods will operate entirely on public blockchains, serving as a bulk alternative to ACH and SWIFT."
He added that if on-chain payroll products become mainstream, banks may gradually fade from view. Although technology may replace many banking functions through self-custody tools and smart contracts, regulatory frameworks will still require the existence of entities with legal responsibilities.
The ultimate outcome may be "zombie-like institutions"—nominal banks that exist solely to meet compliance requirements but play almost no role in actual payment processing, Knab stated.
However, decentralized lending also comes with risks such as smart contract vulnerabilities and market volatility. Franklin claims it mitigates these risks by using audited contracts from Summer.fi and an over-collateralized lending mechanism.
Growing Interest in Yield Generation Strategies
In recent years, interest in yield generation strategies within the crypto space has surged as retail and institutional investors seek to maximize returns on digital assets.
On May 16, Solv Protocol launched a yield-generating Bitcoin token on the Avalanche blockchain, providing institutional investors with more yield opportunities linked to real-world assets (RWA).
On May 1, Ryan Chow, co-founder and CEO of Solv Protocol, stated that demand for yield strategies around Bitcoin is skyrocketing, particularly from companies looking for liquidity without wanting to liquidate BTC.
Related: Kevin O’Leary: Traditional forex and payment platforms "hate" the adoption of stablecoins.
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