Original article by Liz Napolitano
Original source: Decrypt
Original title: Franklin Templeton’s Blockchain Fund Launches on Ethereum Layer-2 Arbitrum
Compiled by: Koala, Mars Finance
Money market funds are launching on the scaling ethereum network as interest in tokenized funds surges.
As tokenized real-world asset (RWA) funds gain popularity among investors, global asset manager Franklin Templeton’s blockchain-based money market fund has launched within the Arbitrum ecosystem, a popular Ethereum scaling solution.
Franklin Templeton’s Nasdaq-listed OnChain U.S. government money fund FOBXX launched on Thursday on the Arbitrum network’s digital wallet, the firm said in a statement. FOBXX’s launch on Arbitrum is part of its issuer’s efforts to expand retail investor access to the fund, with a focus on launching the fund on a highly secure and active network.
“As we build [FOBXX’s] wallet infrastructure into various blockchain ecosystems, the cost of using the network [and] the resilience and scalability of the network are both ... factors that we consider,” Roger Bayston, head of digital assets at Franklin Templeton, told Decrypt on Thursday.
He added: “We just listen to our consumers and customers and meet their needs.”
FOBXX’s expanding accessibility to investors comes at a time when demand for tokenized real-world asset funds is high. The largest such fund, BlackRock’s BUIDL fund, has paid out $7 million in dividends since its launch in March. The tokenized Treasury market more than doubled to $1.8 billion from January to June 2024, according to a Dune dashboard published by cryptocurrency firm 21 Shares.
According to the issuer's website, FOBXX is a fund that "invests at least 99.5% of its total assets in U.S. government securities, cash, and repurchase agreements fully guaranteed by the U.S. government." The fund seeks to provide relatively high returns to institutional and retail investors by investing in government securities and related instruments.
The fund had about $420 million in assets under management as of July 31, making it the second-largest fund in the market, according to the issuer.
FOBXX debuted on the Stellar network in 2021, positioning itself as the first U.S.-domiciled fund to use a public blockchain. It has since also launched on Polygon, expanding its reach to investors.
The fund’s launch on Arbitrum, which has a market capitalization of about $1.8 billion, comes about five months after Franklin Templeton applied to join the network’s Stable Treasury Endowment Program (STEP).
However, FOBXX needs more than just Arbitrum’s approval before it debuts.
“What was most important to us was working not only with the network team but with our friends at the SEC to discuss why (the launch of the fund) would improve outcomes for all stakeholders involved,” Beston said.
