Franklin Templeton fund now on Ethereum via Polygon
Franklin Templeton, the investment management company with $1.4 trillion assets under management, has announced that its OnChain U.S. Government Money Market Fund (FOBXX) is now supported on Ethereum through the layer 2 blockchain, Polygon. This switch allows the fund to process transactions and record share ownership using a public blockchain. It claims to be the first U.S. registered mutual fund to be processed on a blockchain. Further, the move also increases the efficiency and security of the transaction process, leading to reduced operational costs.
The fund invests in highly liquid and short-term investments and aims to provide low risk investment options for its investors. Specifically, it invests in government securities, cash and repurchase agreements. Its steady income feature makes this investment appealing to financial investors, especially in times of market volatility.
Polygon’s market capitalization is above $9.5bn, and Stellar Network, which announced on Monday that it offers the Franklin Templeton fund, has a market capitalization of $2.5bn. The emergence of competitors in the sector signals increased opportunity for the institutional investors, leading to greater demand for digital assets.
The extension of Franklin Templeton’s connection to Polygon Labs is viewed as a major move towards overhauling the existing financial system.The use of single BENJI token, which represents one share of the Franklin Templeton mutual fund, is said to improve the operation of the global financial system.
As part of the development, the Benji Investments app offers holders of Benji access to the Franklin Templeton mutual fund. By inserting share ownership onto blockchain, this new method used in the buy-in process establishes a new precedent for the TradFi players.
Franklin Templeton, which announced its intention to offer digital asset strategies for wealth managers in September signaled its belief in blockchain technology. During recent times, many investors viewed money markets as the best recourse as it permits them to maintain a steady income amidst market flux. The simultaneous increase in demand has come due to the movement of large financial institutions into digital asset trading sessions. As more investors seek access to digital assets and more traditional investment options follow suit, tokenized assets stand to become an extremely disruptive force in capitl markets.
[h/t Lyllah Ledesma]