Wall Street giant Franklin Templeton, which has $1.65 trillion in assets under management, is bringing on an on-chain money market fund, the Franklin OnChain U.S. Government Money Fund (FOBXX), to Coinbase’s Layer-2 network Base.
In a recent post on the microblogging platform X (formerly Twitter), Franklin Templeton announced the expansion to Base, with the fund already being available on several Layer-2 networks, including Ethereum, Arbitrum, Avalanche, Aptos, and Stellar.
The announcement details Franklin Templeton, with the move, has become the first asset manager to build a tokenized fund on Base, the Layer-2 network Coinbase launched in 2023. The network is built on OP Stack, a development kit used by layer-2 Optimism.
New chain unlocked. Benji, our proprietary blockchain-integrated recordkeeping system, is now live on @base! With this announcement, Franklin Templeton is the first asset manager to build a tokenized fund on Base.
Base is a layer 2 blockchain built on Ethereum designed to… pic.twitter.com/lRij7HchSl
— Franklin Templeton Digital Assets (@FTDA_US) October 31, 2024
Coinbase’s layer-2 network has been growing exponentially over the past year, partly thanks to its connection to the Nasdaq-listed cryptocurrency exchange and partly thanks to its extremely low transaction fees, which allowed its trading volume to soar.
Franklin Templeton’s On-chain Money Market Funds
For products like FOBXX, a money market fund that keeps its net asset value per share fixed at $1 and offers investors daily distributions as an Accrual fund, low transaction fees support potential investments as they have a smaller impact on investors’ bottom line.
The fund was launched back in 2021 on the Stellar blockchain before expanding to numerous other networks. The fund is primarily targeted at both institutional and retail investors and is accessible through the Benji Investments platform that Franklin Templeton operates.
Franklin Templeton’s tokenized money market fund competes with others from Wall Street giants, including the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), which has over $500 million in assets under management. FOBXX currently has $410 million in AUM.
Other on-chain money market funds include Ondo’s US Dollar Yield (USDY) and OpenEden’s TBILL Vault (TBILL). These funds were launched as part of the growing trend of real world assets (RWA) being tokenized on-chain.
Other RWA protocols offer investors exposure to private loans or tokenized real estate investments. According to DeFiLlama data, the total value locked on real-world asset protocols on-chain is nearly $7 billion, including gold-backed cryptocurrencies like Tether Gold (XAUT) and Paxos Gold (PAXG).
