Franklin Launches Payroll Treasury Yield Product Targeting Businesses

Franklin, a hybrid cash and crypto payroll provider, is launching a new initiative that aims to turn idle-sitting payroll into an opportunity for yield.

Franklin, a hybrid cash and crypto payroll provider, is launching a new initiative that aims to turn idle-sitting payroll into an opportunity for yield.

The new solution, dubbed Payroll Treasury Yield, uses blockchain lending protocols to help firms earn returns on payroll funds that would otherwise sit idle, the company told Cointelegraph in an exclusive statement.

Franklin said its new offering integrates Summer.fi, a decentralized finance (DeFi) lending platform, to allow companies to deposit stablecoin-denominated payroll reserves into smart contract-based lending pools. These funds are lent to vetted borrowers, and companies earn yields while retaining access to their capital. Companies maintain full custody throughout the process, and the smart contracts used are audited to reduce risk.

“The problem that Franklin solves for is two-fold,” Megan Knab, founder and CEO of Franklin, told Cointelegraph. For companies that have already integrated crypto onto their balance sheets, Franklin helps them use those assets to manage their operations.

“But for the broader market, we are enabling business models of the future, where money moves instantly, more intelligently, and to more globally relevant parties.”

A new initiative by Franklin aims to help companies generate yield on payroll funds using blockchain lending protocols. Credit: Franklin

According to Franklin, its new offering is a viable alternative to traditional treasury tools like sweep accounts or T-bills, which often involve operational complexity and limited returns.

Furthermore, it differentiates from earned wage access (EWA) platforms, which enable employees to access their earned wages before their scheduled payday by engaging in installment loans that accrue interest and fees. These platforms aim to help workers avoid additional debt and associated costs.

“Traditional payments in the next decade will run entirely on public blockchain rails as a wholesale replacement to ACH and SWIFT,” Knab noted.

If onchain payroll products go mainstream, she added, banks could fade into the background. While technology may replace many banking functions with self-custody tools and smart contracts, regulatory frameworks will still require accountable legal entities. The result may be “zombie-like institutions” — banks in name only, existing to meet compliance rules but playing a minimal role in actual payment processing.

However, decentralized lending comes with inherent risks such as smart contract vulnerabilities and market fluctuations. To mitigate these, Franklin explained that it will use Summer.fi’s meticulously audited smart contracts and overcollateralized lending to ensure maximal safety for participating companies.

As interest in yield-generating strategies continues to rise in the cryptocurrency sector, Solv Protocol recently launched a yield-bearing Bitcoin token on the Avalanche blockchain. This move is designed to provide institutional investors with greater exposure to yield opportunities backed by real-world assets (RWAs).

In a May 1 statement, Ryan Chow, co-founder and CEO of Solv Protocol, highlighted the surging demand for yield-generating strategies around Bitcoin, especially from firms seeking liquidity without resorting to liquidate their BTC.