Franklin Templeton’s Blockchain Fund Launches on Ethereum Layer-2 Arbitrum

Franklin Templeton’s Nasdaq-listed OnChain U.S. Government Money Fund, FOBXX, became accessible in digital wallets on the Arbitrum network on Thursday, the firm said in a statement. FOBXX’s launch on Arbitrum is part of its issuer’s efforts to widen access to the fund among retail investors, with a focus on rolling out the fund in highly secure and active networks.

“The cost of using the network [and] the resiliency and the scalability of the network are all… factors that we take into consideration when we are building [FOBXX’s] wallet infrastructure into various blockchain ecosystems,” Franklin Templeton head of digital assets Roger Bayston told Decrypt on Thursday. 

“We’re all about listening to the consumer and the client and giving them what they want,” he added.

FOBXX’s widening accessibility to investors comes at a time when demand for tokenized real-world asset funds is sky-high. The largest such fund, BlackRock’s BUIDL fund, has paid out $7 million in dividends since its launch in March. The tokenized treasury market more than doubled to $1.8 billion from January to June 2024, according to a Dune dashboard published by crypto firm 21 Shares.

FOBXX is a fund that invests “at least 99.5% of its total assets in U.S. government securities, cash and repurchase agreements collateralized fully by [the] U.S. government,” according to its issuer’s website. It aims to offer relatively high returns to institutional and retail investors by investing in government securities and related instruments.

The fund held roughly $420 million in assets under management as of July 31, according to its issuer’s data, making it the second largest offering on the market.

FOBXX first debuted on the Stellar network in 2021, positioned as the first U.S. registered fund to utilize a public blockchain. Since then, it has also become available on Polygon, broadening its reach to investors. 

The fund’s launch on Arbitrum comes roughly five months after Franklin Templeton applied to the network’s Stable Treasury Endowment Program (STEP). Arbitrum has a market capitalization of roughly $1.8 billion.

The process leading up to FOBXX’s debut required much more than just Arbitrum’s approval, however. 

“What’s super important for us is to not just work with the network’s team, but also with our friends in the… SEC to speak about why [the fund’s launch] improves outcomes for all the stakeholders that are involved,” Bayston said. 

Edited by Ryan Ozawa.