Franklin Templeton launches tokenized money fund on Base

by

As a researcher with a keen interest in digital assets and their potential to revolutionize traditional finance, I find Franklin Templeton’s latest move to launch its tokenized money fund on Base, Coinbase’s layer-2 network, quite intriguing. Having closely followed the evolution of this space, it’s fascinating to witness regulatory bodies starting to acknowledge blockchain networks as legitimate instruments for financial recordkeeping.

On October 31st, Franklin Templeton announced that they will be introducing their tokenized money fund through Coinbase’s layer-2 network, known as Base.

On the X platform, Franklin Templeton announced the debut of the Franklin OnChain US Government Money Fund (FOBXX), marking it as the initial tokenized fund to launch there.

2021 saw the birth of FOBXX, which has already made its mark by deploying on various blockchain platforms such as Stellar, Polygon, and Arbitrum.

Related: Franklin Templeton’s tokenized money fund launches on Arbitrum

Franklin Templeton stands out amongst other tokenized fund managers by delegating a significant part of its reporting duties, including share ownership records that are usually managed by traditional off-chain agents, to publicly accessible blockchain networks.

In simpler terms, Roger Bayston, who leads digital assets at Franklin Templeton, stated in July that our product is uniquely capable of utilizing decentralized ledger technologies for maintaining official records of transactions within public networks.

Launching FOBXX on Base suggests that U.S. financial regulators acknowledge Base’s blockchain as a valid tool for maintaining financial records.

Investors can find reliable, low-risk returns with money funds that primarily invest in easily accessible financial instruments like short-term Treasury bonds and commercial papers.

As of October 2024, Franklin Templeton’s FOBXX fund holds roughly $435 million in total assets and has been yielding around a 4.7% return on an annual basis.

It is accessible through Franklin Templeton’s Benji Investments platform.

Launching from the foundation, Franklin Templeton is taking a new step to make it simpler for users to invest in their tokenized real-world assets (RWAs).

As of its debut in 2023, Base has risen to become the second widely used layer-2 scaling option for Ethereum. Its Total Value Locked (TVL) stands around $8 billion, as per the data provided by L2Beat.

Arbitrum leads with upwards of $13 billion in TVL, the data shows.

Globally, the tokenized Representatives of Assets Without Boundaries (RWAs), ranging from financial funds to artistic pieces, present a massive potential market worth approximately $30 trillion, as stated by Colin Butler, the global head of institutional capital at Polygon, during his interview with CryptoMoon in August.

Demand is surging for products that tokenize T-bills and other highly liquid yield-bearing assets.

Among FOBXX’s main competitors stands out the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), which manages around $530 million in assets as per information from RWA.xyz.

Read More

2024-10-31 22:06