Asset manager Franklin Templeton is partnering with real-world asset powerhouse Ondo Finance to issue tokenized versions of five of its ETFs tracking stocks, bonds, and gold. The new onchain products are geared for a crypto-native audience who prefer to access their investments through a digital wallet rather than a traditional brokerage, according to the announcement.
Because the funds are onchain, they will trade 24/7 and can be deployed in the wider DeFi ecosystem. Ondo market makers will provide liquidity for the tokens, including during hours when stock and bond markets are closed, Bloomberg, which was first to report the news, reported on Wednesday.
“The next phase of digital assets isn’t just about trading crypto, but building your optimized financial life onchain, and we’re excited to combine efforts with Ondo to accelerate toward this next era of investing,” said Sandy Kaul, head of innovation at Franklin Templeton. “As digital native audiences mature and their needs evolve, we’ll be ready to bring new innovative strategies to digital wallets alongside the trusted investment advice that Franklin Templeton has delivered to TradFi clients for nearly 80 years.”
Franklin Templeton has been a pioneer in tokenization since 2021, when its OnChain U.S. Government Money Fund (FOBXX/BENJI) launched as the first U.S.-registered mutual fund to trade on a public blockchain. Wednesday’s announcement, however, will see the firm take a wider leap into the growing tokenization sector by bringing a host of popular existing products onchain.
The five funds slated for tokenization include a growth-oriented U.S. equity strategy (FFOG), a systematic large-cap equity fund (FLQL), a gold fund (FGDL), a high-yield corporate bond fund (FLHY), and an income-focused U.S. equity strategy (INCE). Like its other tokenized offerings, Ondo will purchase and hold shares of the underlying ETFs and issue tokens through a special-purpose vehicle.
Other asset managers and brokers have also taken steps to bring real-world assets into crypto-native environments. WisdomTree recently extended its full suite of tokenized funds onto Solana, in addition to representations on Ethereum and Stellar, while Robinhood, Coinbase, Kraken, and others are working to issue onchain equities, including ETFs.
Franklin’s tokenized ETFs will initially be available in Europe, Asia-Pacific, the Middle East, and Latin America. The U.S. Securities and Exchange Commission recently published guidance reaffirming the view that onchain securities fall squarely within its remit.
BENJI is the fourth-largest onchain Treasuries fund with over $1 billion in managed assets, according to RWA.xyz. Franklin as a whole reports $1.7 trillion in assets under management, while Ondo counts $620 million in total value locked.
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