Asset management giant Franklin Templeton has partnered with the Arbitrum Foundation to launch the Franklin On-Chain U.S. Government Currency Fund (FOBXX).
The partnership signals growing institutional interest in the integration of traditional finance (TradFi) and decentralized finance (DeFi).
Franklin Templeton expands into decentralized finance with Arbitrum tokenization fund
The project, announced on August 8, will allow investors to invest in FOBXX funds using Benjy, Franklin Templeton’s blockchain-integrated record system. Individual investors can access products through the Benjy Investments mobile app, while institutional investors can trade through the Benjy Institutional Portal.
FOBXX debuted on Stellar in April 2021 and is the first U.S.-registered fund issued via a public blockchain. The fund later expanded to Polygon in April and now to Arbitrum.
The fund manager’s goal is to build a diversified portfolio of government securities. Like all mutual funds, investments in FOBXX are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Benefits of Blockchain Technology in Fund Management
According to the announcement, blockchain technology brings benefits to fund shareholders. It can improve operational efficiency by enhancing security, speeding transactions, and reducing costs.
Expansion into the Arbitrum Ecosystem
Franklin Templeton first submitted the application in May, according to the Arbitrum Foundation’s forum report. The asset manager aims to increase trading and decentralized finance integration, planning to add more networks in the future.
Growing Interest in Tokenized Government Securities
These developments reflect growing interest in tokenized government securities. The industry currently has $1.8 billion in assets under management (AUM), with major players including BlackRock’s BUIDL, Franklin Templeton’s Benjy, and Ondo Finance’s USDY and UOSG.
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