Source: Cointelegraph
Original: ( Franklin Trust Introduces Blockchain Technology to Generate Returns on Idle Payroll Funds )
Hybrid crypto payroll service provider Franklin recently launched an innovative scheme aimed at converting corporate idle payroll funds into revenue opportunities. According to an exclusive statement provided by the company to Cointelegraph, this new service called 'Payroll Treasury Yield' utilizes blockchain lending protocols to help companies generate returns from previously idle payroll funds.
The scheme integrates the decentralized finance (DeFi) lending platform Summer.fi, allowing companies to deposit stablecoin-valued payroll reserves into a smart contract-based lending pool. These funds will be lent to rigorously vetted borrowers, enabling companies to earn returns while retaining the right to use the funds. Throughout the process, companies maintain complete custody of the funds, with all smart contracts undergoing security audits to mitigate risks.
Franklin founder and CEO Megan Knab pointed out to Cointelegraph: 'We are addressing dual pain points.' 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 — achieving smarter, more immediate, and more globalized flows of capital.' Knab added.
Alternative to T-Bills
Franklin stated that its newly launched product is an alternative to traditional government bond instruments (such as automatic roll-over accounts or Treasury bills T-Bills), which typically involve operational complexity and limited returns.
Moreover, this product is different from 'earned wage access' platforms (EWA), 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 fully operate 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 bank functions through self-custody tools and smart contracts, the regulatory framework will still require the existence of entities with legal responsibilities.
The ultimate result could be 'zombie-like institutions' — nominal banks that exist merely 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 stated that it seeks to minimize these risks by using audited contracts from Summer.fi and an over-collateralized lending mechanism.
Yield-generating strategies are increasingly gaining attention
In recent years, as retail and institutional investors seek to maximize the returns on digital assets, interest in yield-generating strategies in the crypto space has surged.
On May 16, Solv Protocol launched a yield-generating Bitcoin token on the Avalanche blockchain, providing institutional investors with more opportunities linked to real-world assets (RWA).
On May 1, Solv Protocol co-founder and CEO Ryan Chow stated that demand for yield strategies around Bitcoin is surging, particularly from companies seeking liquidity without liquidating BTC.
Related: Kevin O'Leary: Traditional Forex and payment platforms 'hate' the adoption of stablecoins
