Franklin Templeton's onchain money market fund launches on Aptos

Global asset management giant Franklin Templeton has launched its OnChain U.S. Government Money Fund (FOBXX) on its fifth blockchain network, Aptos, in collaboration with the Aptos Foundation.

Institutional investors can gain exposure to the underlying FOBXX asset in digital wallets via Franklin Templeton’s blockchain-integrated Benji Investments platform and BENJI token. Investors “may hold their wallets on the Aptos network upon request,” the firm said in a statement shared with The Block.

The collaboration is designed to increase the interoperability of real-world and treasury-backed assets across non-EVM blockchain environments. 

“We need to connect not just the TradFi and DeFi worlds, but EVM and non-EVM networks as well,” Aptos Foundation Head of Grants and Ecosystem Bashar Lazaar said. “Integrating the Benji Investments platform with the Aptos Network is a massive step in the right direction and we look forward to welcoming them to the Aptos ecosystem.”

The FOBXX fund invests in low-risk U.S. government securities, including fixed, floating and variable rate securities in addition to repurchase agreements collateralized fully by U.S. government securities or cash. Initially launched on the Stellar blockchain, the fund subsequently expanded to Polygon, Arbitrum and Avalanche. FOBXX on Aptos claims to have already received more than $20 million in subscriptions upon launch.

“We chose the Aptos Network given its unique characteristics which meet our rigorous suitability standards for the Benji platform,” Franklin Templeton Head of Digital Assets Roger Bayston said. “Today’s announcement is an important milestone in our ongoing journey to unlock new asset management capabilities with blockchain technology.”

Aptos is a relatively new Layer 1 blockchain based on the Move programming language originally developed at Meta by a team composed of people from Facebook’s now-defunct Diem stablecoin project. It aims to offer a faster and more scalable alternative to other networks.

Monthly active addresses on Aptos have steadily increased this year, reaching 7.5 million as of September, according to The Block’s data dashboard. For comparison, Ethereum had 12.3 million active addresses last month.

"We are proud that traditional financial firms are choosing to develop on the Aptos Network and bring the benefits of decentralization to their clients," Aptos Labs co-founder and CEO Mo Shaikh said.  

The growing market for tokenized government securities

FOBXX was the first U.S.-registered fund to use a public blockchain to process transactions and record share ownership, introduced in 2021. Total assets under management in tokenized government securities have subsequently risen to become a $2 billion market, according to data compiled by asset management firm 21.co, the parent company of bitcoin exchange-traded fund provider 21Shares.

Franklin Templeton, founded in 1947 and with more than $1.6 trillion in total assets under management, initially led the tokenized U.S. Treasurys niche. However, it has come under stiff competition from BlackRock’s new BUIDL fund, tokenized in collaboration with Securitize on Ethereum, among others, in recent months.

BlackRock’s BUIDL product currently leads the niche with $520 million in assets under management, equivalent to around 25% market share per 21.co’s data. In April, BUIDL overtook Franklin Templeton’s fund, though the BENJI product remains the second-largest, with $452 million in assets under management, according to the firm. That same month, Franklin Templeton enabled peer-to-peer transfers for the fund’s BENJI tokens.

Market Landscape of Tokenized Government Securities by Product. Image: 21.co/Dune Analytics.

Franklin Templeton is no stranger to blockchain technology, having run node validators and various investment strategies in the crypto space since 2018. The asset manager launched its spot Bitcoin ETF, EZBC, in January and a spot Ethereum ETF, EZET, in July, attracting $450.4 million and $31.8 million in assets under management, respectively, according to The Block’s ETFs Tracker Page. In June, the firm announced it was exploring additional crypto funds beyond these initial products.