The Arbitrum Foundation and the global asset manager Franklin Templeton announced yesterday that the Franklin OnChain U.S. Government Money Fund (FOBXX) is available on Arbitrum.

Thanks to this launch on what is probably the main layer-2 for Ethereum to date, Arbitrum users can gain exposure to FOBXX through the Benji Investments platform.

Franklin Templeton

Franklin Templeton is an American investment company founded in 1947.

It is one of the largest groups in the world for managed savings, with over 1.6 trillion dollars in assets under management. It has approximately 25 million clients, including private citizens, professional investors, and institutional investors.

It is listed on the New York Stock Exchange with the ticker BEN. 

Its mission is to help clients achieve better results through investment management expertise, wealth management, and technological solutions, with more than 1,500 investment professionals in the main financial markets around the world.

This is therefore a true traditional financial institution that has decided to also enter the crypto sector. 

Benji Investments is its storage system integrated with blockchain.

In the distant 2018, the group created the Franklin Templeton Digital Assets division that works precisely on technological solutions based on blockchain, running node validators and developing a wide range of investment strategies. 

In January, Franklin Templeton was one of the financial institutions to launch a Bitcoin ETF on the US exchanges, and in February it was one of the first to request approval for a spot Ethereum ETF as well.

Furthermore, for some time now it has been pursuing a strategy based on partnerships to make its financial products available on other platforms as well.

The partnership between Franklin Templeton and Arbitrum

The new partnership with Arbitrum aims to accelerate the integration of decentralized finance into traditional financial services. 

Thanks to the integration of the Arbitrum network into the Benji Investments platform, Franklin Templeton will further extend the compatibility of FOBXX within the digital asset ecosystem and reach an audience previously unexplored for the asset manager.

The FOBXX fund was introduced in 2021, and according to Franklin Templeton, it is the first and only fund registered in the USA to use a public blockchain as a registration system to process transactions and record share ownership. 

Arbitrum: the layer-2 chosen by Franklin Templeton for the on-chain fund

Arbitrum is a layer-2 of Ethereum that allows fast and very cheap transactions. 

In the DeFi sector, it is the layer-2 with the highest TVL (2.7 billion dollars), which also allows it to surpass from this point of view layer-1 such as Avalanche or TON. 

Behind Arbitrum is the Arbitrum Foundation, founded in March 2023, which supports and grows the network and its community. 

In particular, Arbitrum One is the scalability solution, initially developed by Offchain Labs and launched in 2021, which offers very fast transactions at very low costs with security derived from Ethereum through Optimistic Rollup technology. 

Arbitrum also has its own token ARB, with a market capitalization of less than 2 billion dollars which places it only at the 45th position. 

During the course of 2024, the performance of ARB’s price has been disappointing, for now, as after rising from $1.4 to $2.3, it then fell below $0.6. 

The token debuted on the crypto markets only last year at around $1.3, so the current price is less than half of the initial one, as well as still being 78% lower than the all-time high in January. 

Instead, ETH for example is at +18% compared to the beginning of the year, and only at -45% from the historical highs of 2021. 

The landscape of layer-2

By now it is clear that the scalability of Ethereum will be achieved mainly thanks to layer-2 solutions like Arbitrum. 

Therefore, the significant expansion of the Ethereum ecosystem will necessarily also, and above all, involve an increasing integration of layer-2 with traditional financial instruments. 

Even in the DeFi sector, the path seems to be this, although to date the TVL of Ethereum’s layer-1 (almost 50 billion dollars) is still significantly higher than the sum of all layer-2s. In fact, Ethereum’s layer-1 currently holds more than 58% of all DeFi TVL, including that of other layer-1s like BCS or Solana.  

The role of layer-2 is primarily to make transactions faster and cheaper, which is mainly useful for those who perform many of them. 

The comment 

The CEO and co-founder of Offchain Labs (the main contributor to Arbitrum), Steven Goldfeder, stated: 

“The commitment of Franklin Templeton to innovation aligns with our mission to provide scalable and efficient solutions for the financial sector. We are excited to see Franklin Templeton join the Arbitrum ecosystem and look forward to seeing the transformative impact that their participation will bring to our community”.

The Head of Digital Assets at Franklin Templeton, Roger Bayston, added: 

“The expansion into the Arbitrum ecosystem is an important step in our journey to enhance our asset management capabilities with blockchain technology. We are excited about the opportunities this partnership will unlock for our company and our clients”.