Franklin Templeton’s Blockchain Investment Fund Debuts on Ethereum’s Layer-2 Solution, Arbitrum
August 8, 2024
Franklin Templeton’s blockchain-based money market fund has recently launched on the Arbitrum ecosystem, marking a significant step in the growing popularity of tokenized real-world asset (RWA) funds among investors. Arbitrum, known for its role as a scaling solution for Ethereum, has provided the platform for Franklin Templeton’s Nasdaq-listed OnChain U.S. Government Money Fund, FOBXX, to be accessible in digital wallets as of Thursday.
The move to launch FOBXX on Arbitrum reflects the firm’s commitment to expanding access to the fund for retail investors, particularly focusing on secure and active networks to ensure a seamless experience. Roger Bayston, head of digital assets at Franklin Templeton, emphasized the importance of factors like network cost, resiliency, and scalability in the decision-making process for integrating FOBXX into various blockchain ecosystems.
Bayston highlighted the firm’s customer-centric approach, stating, “We’re all about listening to the consumer and the client and giving them what they want.”
With the demand for tokenized real-world asset funds on the rise, FOBXX’s availability on Arbitrum comes at an opportune time. Notably, BlackRock’s BUIDL fund, the largest fund of its kind, has distributed $7 million in dividends since its inception in March. The tokenized treasury market has experienced significant growth, with funds reaching $1.8 billion by June 2024, according to data from a Dune dashboard by 21 Shares.
FOBXX primarily invests in U.S. government securities, cash, and fully collateralized repurchase agreements, aiming to provide attractive returns to both institutional and retail investors through strategic investments in government securities and related instruments. As of July 31, the fund managed approximately $420 million in assets, positioning it as the second-largest offering in the market.
Originally launched on the Stellar network in 2021 as the first U.S. registered fund leveraging a public blockchain, FOBXX has since expanded its reach by becoming available on Polygon. The recent integration with Arbitrum follows Franklin Templeton’s application to the network’s Stable Treasury Endowment Program (STEP), reflecting the fund’s continued growth and adaptation to evolving market trends.
The process leading up to FOBXX’s debut on Arbitrum involved collaboration not only with the network’s team but also with regulatory bodies such as the SEC to ensure compliance and stakeholder alignment. This strategic approach underscores Franklin Templeton’s commitment to delivering innovative solutions that benefit all parties involved in the ecosystem.
The article has been edited by Ryan Ozawa.
