TL;DR

Franklin Templeton expands his OnChain US Government Money Fund (FOBXX) to the Arbitrum network, adding Stellar and Polygon.
The fund, with a market value of $420 million, seeks to integrate decentralized finance into the traditional financial system.
Arbitrum will initially be available to institutional portfolios and the expansion aligns with Franklin Templeton’s strategy to leverage blockchain technology.

Franklin Templeton, a leading global asset management firm with $1.5 trillion in assets under management, has expanded its OnChain US Government Money Fund (FOBXX) to the Arbitrum network, a Layer 2 blockchain on Ethereum.

This addition marks the third blockchain on which the fund’s shares can be traded, having previously been tokenized on the Stellar and Polygon networks.

This expansion aims to more deeply integrate decentralized finance into the traditional financial system, facilitating access to new investors.

Launched in 2021, the FOBXX fund pioneered the use of a public blockchain to record transactions and share ownership.

With a current market value of $420 million, it ranks as the third-largest product linked to U.S. government securities on the chain.

The fund’s strategy is to invest at least 99.5% of its assets in U.S. government securities, cash and repurchase agreements secured by these securities, with the goal of maintaining a stable share price of $1.00.

The recent listing of Arbitrum is a significant step in Franklin Templeton’s strategy to leverage its asset management capabilities through blockchain technology.

Arbitrum, which is the Ethereum layer 2 network with the largest total value locked, offers an efficient solution for integrating traditional assets into the DeFi world.

While Arbitrum will initially be available only to institutional portfolios, this expansion reflects Franklin Templeton’s commitment to innovation and its desire to capture a broader audience for FOBXX.

Adoption of real-world asset (RWA) tokenization is on the rise, with major firms like BlackRock and crypto startups like Securitize and Ondo Finance also entering the space.

BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), which operates on the Ethereum mainchain, leads this market with a capitalization of $519 million.

Impact and Future of Franklin Templeton

Franklin Templeton, although facing competition, remains a major player with its FOBXX, which maintains a significant market share.

Franklin Templeton’s move into Arbitrum not only underscores its commitment to the evolution of the financial market, but also highlights the growing relevance of decentralized finance.

The integration of blockchain technology into the realm of money funds and its ability to offer efficient and secure management reflects a shift in the way traditional investments are handled.

As more financial institutions explore and adopt these technologies, we are likely to see further convergence between traditional finance and innovative DeFi solutions, marking a new era in asset management and investment.

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Filed under: News - @ August 8, 2024 3:22 pm