Originally published on: October 31, 2024
Franklin Templeton has made a groundbreaking move by launching its tokenized money fund on Base, Coinbase’s layer-2 network. This innovative step was announced by the asset manager on October 31.
The Franklin OnChain US Government Money Fund (FOBXX) is set to become the first tokenized fund to debut on Base, according to a post on the X platform by Franklin Templeton. This fund, established in 2021, has previously been introduced on various blockchain networks like Stellar, Polygon, and Arbitrum.
What sets Franklin Templeton apart from other tokenized fund managers is its decision to outsource a significant portion of reporting requirements to blockchain networks’ public ledgers. This includes tasks like managing share ownership records, which are conventionally handled by an off-chain transfer agent.
Roger Bayston, the head of digital assets at Franklin Templeton, highlighted this unique feature in a conversation with Cointelegraph in July. He stated, “We are currently the only product with the ability to use public distributed ledger technologies for official transaction record-keeping.”
The launch of FOBXX on Base demonstrates the recognition by U.S. regulators of Base’s public ledger as a legitimate tool for financial recordkeeping. Money funds like FOBXX offer investors low-risk yields by investing in highly liquid assets such as short-dated Treasury bills and commercial paper.
Presently, Franklin Templeton’s FOBXX holds net assets of around $435 million and has been delivering annualized returns of approximately 4.7% as of October 2024. Investors can access this fund through Franklin Templeton’s Benji Investments platform.
The introduction of FOBXX on Base is just the latest move by Franklin Templeton to broaden the accessibility of its tokenized real-world assets (RWAs). Base, since its launch in 2023, has emerged as the second most popular layer-2 scaling solution on Ethereum, boasting a total value locked (TVL) of about $8 billion, as reported by L2Beat.
According to data from RWA.xyz, Arbitrum leads the pack with a TVL exceeding $13 billion. Tokenized RWAs, spanning from money funds to artworks, represent a massive $30 trillion market opportunity globally, as noted by Colin Butler, Polygon’s global head of institutional capital.
The demand for products that tokenize T-bills and other high-liquidity yield-bearing assets is on the rise. FOBXX’s main competitor is the BlackRock USD Institutional Digital Liquidity Fund, managing assets of approximately $530 million.
In conclusion, Franklin Templeton’s move to launch its tokenized money fund on Base signifies a major step forward in the world of investing. By leveraging the capabilities of blockchain networks, this fund is poised to provide investors with a unique and innovative way to access low-risk yields in a rapidly evolving financial landscape.
