Franklin Templeton launched its money market fund on Arbitrum, a Layer-2 network on Ethereum in hopes of promoting investor access. Franklin Templeton’s money market fund launched when demand for tokenized real-world asset (RWA) funds was high.
On Thursday, FOBXX, Franklin Templeton’s Nasdaq-listed money market fund, was launched on the Arbitrum ecosystem. The launch saw digital wallets becoming accessible on Arbitrum, Ethereum’s Layer-2 network.
Roger Bayston, Franklin Templeton’s head of digital assets, said that the launch would facilitate widened access to the Fund for retail investors. The Arbitrum launch will allow investors to hold and manage their assets in their digital wallets within the Ethereum scaling ecosystem.
Franklin Templeton’s FOBXX fund expands into Arbitrum
Franklin Templeton’s @FTI_DA OnChain U.S. Government Money Fund is now available on Arbitrum!
We’re excited to have access to the BENJI platform and see a major financial institution, Franklin Templeton, build on Arbitrum!https://t.co/CRWCFyz3NM pic.twitter.com/yrlwflYOow
— Arbitrum (💙,🧡) (@arbitrum) August 8, 2024
Franklin Templeton’s FOBXX fund held approximately $420 million in assets under management as of July 31st. According to Franklin Templeton, the transition to the Arbitrum ecosystem was to allow retail investors access to the fund on secure and active networks.
Roger Bayston stated that the cost, resilience, and scalability of the network were critical factors when selecting which option to use. Bayston also noted that the FOBXX wallet infrastructure was developed to suit various blockchain ecosystems and widen investor access to the fund.
Templeton claims FOBXX is the “first and only U.S. registered fund” to integrate blockchain technology through its OnChain structure and is listed on public blockchains. FOBXX was tokenized with the BENJI tokens used to represent shares that can be traded or transferred more efficiently than traditional shares.
Templeton explained that using BENJI tokens improved transparency as the blockchain system also recorded transaction activity. In 2021, the fund was launched on the Stellar blockchain before launching on the Polygon network. The fund has recently launched on the Arbitrum ecosystem after more consultations and oversight from the U.S. Securities and Exchange Commission (SEC).
Arbitrum is one of the scaling solutions on the Ethereum network. According to Arbitrum, its scaling solution is decentralized, fast, reliable, and supports smart contracts. As of August 1st, 2024, Arbitrum had 1.53 million active wallets, $16.66B in total value locked (TVL), and 40% of the L2 market share. Arbitrum’s figures are significantly higher than Polygon’s and Stellar’s TVLs, which are $800 million and $11.15 million, respectively.
FOBXX adjusts its approach to meet public demand
FOBXX typically invested most of its assets in low-risk assets and government securities. These investments include U.S. government securities, repurchase agreements collateralized by U.S. government securities, and cash. The investments accounted for 99.5% of the firm’s total assets typically offered to institutional and retail investors.
However, with the high demand for tokenized real-world asset (RWA) funds, the firm capitalized on the opportunity to launch Arbitrum.
Speaking about the launch, Roger Bayston, Franklin Templeton’s Head of Digital Assets, said, “We are enthusiastic about the opportunities this partnership will unlock for our firm and our clients.” He proceeded to affirm that the Arbitrum launch will accelerate the integration of decentralized finance into traditional financial services by tapping into an under-utilized audience.
