Asset management giant Franklin Templeton partners with Arbitrum Foundation for new tokenized fund
Franklin Templeton, a leading asset management company, has joined forces with the Arbitrum Foundation to launch the Franklin On-Chain U.S. Government Currency Fund (FOBXX). This partnership highlights the increasing interest from institutional investors in combining traditional finance (TradFi) with decentralized finance (DeFi).
Introduction of the Franklin On-Chain U.S. Government Currency Fund
The collaboration was announced on August 8, unveiling the opportunity for investors to participate in FOBXX funds through Benjy, Franklin Templeton’s blockchain-based record system. Retail investors can access the products via the Benjy Investments mobile app, while institutional investors can trade through the Benjy Institutional Portal.
FOBXX initially launched on Stellar in April 2021, becoming the first U.S.-registered fund issued on a public blockchain. Subsequently, it expanded to Polygon in April before extending its reach to Arbitrum.
Benefits of blockchain technology in fund management
The primary objective of FOBXX is to construct a diversified portfolio of government securities. It’s essential to note that, like all mutual funds, investments in FOBXX are not backed or insured by entities such as the Federal Deposit Insurance Corporation.
Franklin Templeton submitted the application for this initiative in May, as reported by the Arbitrum Foundation’s forum. Furthermore, the asset manager is set to participate in the Arbitrum Stabilizing Treasury Endowment Program (STEP) to enhance trading and DeFi integration, with plans to integrate additional networks in the future.
Growing interest in tokenized government securities
As the adoption of tokenized government securities continues to rise, the industry currently boasts $1.8 billion in assets under management (AUM), based on data from 21.co via Dune Analytics. Key players in this space include BlackRock’s BUIDL, Franklin Templeton’s Benjy, and Ondo Finance’s USDY and UOSG.
The collaboration with Arbitrum represents a significant step forward for Franklin Templeton in leveraging blockchain technology to enhance asset management capabilities. This move is expected to benefit both the company and its clients, ushering in new opportunities for growth and innovation.
