- Franklin Templeton has partnered with the Arbitrum Foundation to launch the OnChain U.S. Government Money Fund (FOBXX).
- Previously, the fund was initiated on the Stellar and Polygon networks, represented by the BENJI token.
- This collaboration marks a significant milestone for the altcoin project.
Franklin Templeton collaborates with Arbitrum Foundation to enhance its blockchain-based investment platforms.
Launch of OnChain U.S. Government Money Fund on Arbitrum Network
Global asset management giant Franklin Templeton has teamed up with the Arbitrum Foundation to introduce the OnChain U.S. Government Money Fund (FOBXX) on the Arbitrum network. This initiative allows investors to use Franklin Templeton’s blockchain-integrated Benji Investments platform and the BENJI token to invest in FOBXX via their digital wallets. As noted, investors can access the Arbitrum network on-demand, subject to eligibility.
Integration of Traditional Finance and Decentralized Finance
The collaboration aims to bridge the gap between traditional finance and the world of decentralized finance (DeFi). Initially launched on the Stellar blockchain and later expanded to Polygon, the FOBXX fund seeks to provide competitive returns by investing primarily in government securities while maintaining a stable share price of $1. More networks might support the fund in the future. Roger Bayston, Franklin Templeton’s Head of Digital Assets, highlighted that the expansion into the Arbitrum ecosystem strengthens their asset management capabilities using blockchain technology.
Arbitrum’s Leading Position in the Market
According to DeFiLlama, Arbitrum remains a leader in its field with deposits totaling $2.6 billion in total value locked (TVL). The altcoin project holds a 34% market share, making it the largest Ethereum Layer-2 network. It also continuously leads in active daily addresses compared to optimistic and zk-rollup competitors. Steven Goldfeder, CEO and co-founder of Offchain Labs (the core team behind Arbitrum), expressed excitement about Franklin Templeton joining their ecosystem and the transformative impact this collaboration is expected to bring to their community.
Significance of Tokenized Government Securities
Launched in 2021, FOBXX was the first U.S.-registered fund to use a public blockchain for processing transactions and recording share ownership. According to data compiled by asset management company 21.co, the total assets managed in tokenized government securities have since grown to a $1.8 billion market. Established in 1947, Franklin Templeton manages over $1.5 trillion in assets and initially led the niche market for tokenized U.S. Treasury securities. However, they have faced stiff competition recently from BlackRock’s new BUIDL fund, which currently manages $519 million in assets with a 28.4% market share. In April, BUIDL surpassed Franklin Templeton’s fund; however, the BENJI product remains the second-largest with $402 million in assets and a 22% market share. Additionally, Franklin Templeton enabled peer-to-peer transfers for BENJI tokens in the same month.
Conclusion
The partnership between Franklin Templeton and the Arbitrum Foundation marks a pivotal step in integrating traditional finance with blockchain technology. By expanding their footprint into the DeFi space, Franklin Templeton offers investors new opportunities for stable, government-backed investments through innovative, tokenized solutions. As this market evolves, the collaboration sets a precedent for future developments and showcases the potential for traditional financial institutions to embrace blockchain technology.
