Franklin Templeton Unveils Peer-to-Peer Trading for Tokenized Treasury Fund

Asset management giant Franklin Templeton is making waves in the digital asset space by enabling peer-to-peer transfers for its $380 million tokenized money market fund. This move positions Franklin Templeton's Franklin OnChain U.S. Government Money Fund (FOBXX) at the forefront of integrating traditional financial instruments with blockchain technology.

The fund's shares are represented by BENJI tokens, which trade on the Stellar (XLM) and Polygon (MATIC) blockchains. Previously, BENJI tokens could only be purchased and redeemed through authorized custodians. Now, investors can transfer these tokens directly between each other without intermediaries, streamlining the trading process.

This development is a significant step for Franklin Templeton as it seeks to compete with other asset managers venturing into the digital asset arena. Notably, rivals like Ondo Finance and BlackRock's BUIDL fund already offer peer-to-peer transfer functionality for their tokenized products. By enabling peer-to-peer transfers, Franklin Templeton is enhancing the accessibility and tradability of the FOBXX fund, potentially attracting a wider range of investors, particularly those comfortable with digital asset transactions.

The ability to transfer BENJI tokens directly between investors paves the way for future integrations with decentralized finance (DeFi) protocols. DeFi refers to a peer-to-peer financial ecosystem built on blockchain technology, where users can lend, borrow, and invest without traditional financial institutions. The potential to use BENJI tokens as collateral within DeFi platforms could unlock additional utility and value for investors.

Franklin Templeton's move reflects a growing interest in tokenized traditional assets. Tokenization refers to the process of converting a real-world asset, like a bond or stock, into a digital token on a blockchain. This technology offers several advantages, including fractional ownership, increased transparency, and potentially faster settlement times.

The market for tokenized Treasuries, specifically, has witnessed a surge in recent times. Data suggests that the market has grown tenfold since early 2023, reaching $1.2 billion. This growth is likely fueled by digital asset investors seeking safe and reliable yields for their crypto holdings, similar to those offered by traditional U.S. Treasuries.

Franklin Templeton's tokenized treasury fund, the FOBXX, stands as the largest and oldest in the market. By enabling peer-to-peer transfers, Franklin Templeton is aiming to solidify its position as a leader in this burgeoning space. The move is emblematic of a broader trend within the traditional finance industry, where established institutions are increasingly exploring the potential of blockchain technology and digital assets.

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