Franklin Templeton Expands Blockchain Presence with Money Market Fund Launch on Arbitrum

Global asset management giant Franklin Templeton has expanded its blockchain footprint by launching its OnChain U.S. Government Money Fund (FOBXX) on Arbitrum, a leading Ethereum Layer 2 scaling solution. This move marks a significant step in bridging traditional finance with decentralized finance (DeFi) and opens up new opportunities for investors in the digital asset space.

FOBXX, introduced in 2021, was the first U.S.-registered fund to use a public blockchain for transaction processing and share ownership records. Initially launched on the Stellar network, the fund expanded to Polygon in April 2023, and now adds Arbitrum to its supported platforms.

Investors can access FOBXX through Franklin Templeton’s proprietary Benji Investments platform, which allows them to manage their assets using digital wallets. The fund aims to provide competitive returns by primarily investing in U.S. government securities and related instruments while maintaining a stable $1 share price.

Roger Bayston, Head of Digital Assets at Franklin Templeton, commented on the expansion: “Launching on Arbitrum is an important step in our journey to empower our asset management capabilities with blockchain technology. We’re enthusiastic about the opportunities this will unlock for our firm and clients.”

The move comes as tokenized real-world assets (RWAs) gain traction among investors. According to data from 21.co, the tokenized treasury market more than doubled to $1.8 billion in the first half of 2024. FOBXX currently ranks as the second-largest tokenized government securities fund, with approximately $420 million in assets under management.

Steven Goldfeder, CEO and Co-Founder of Offchain Labs, Arbitrum’s core contributor, expressed excitement about the collaboration: “Franklin Templeton’s commitment to innovation aligns with our mission to provide scalable and efficient solutions for the financial sector. We look forward to the transformative impact their participation will bring to our community.”

This launch is part of Franklin Templeton’s broader strategy to embrace blockchain technology. Since 2018, the firm has been active in the space, running node validators and developing various investment strategies. The asset manager has also launched spot Bitcoin and Ethereum ETFs in recent months, further demonstrating its commitment to digital assets.