Franklin Templeton, a leading asset manager in the US, has announced the expansion of its OnChain US Government Money Market Fund (FOBXX) to Ethereum’s Arbitrum, marking its third blockchain integration. This move is a significant step forward in the adoption of blockchain technology in the financial sector, and it highlights the growing demand for crypto assets among institutional investors.

A Pioneer in Blockchain Adoption

The FOBXX fund, launched in 2021, was a pioneer in utilizing public blockchains for transactions and fractional ownership, contributing nearly US$2 billion in traded value. This innovative approach has made Franklin Templeton a prominent player in the tokenised treasury market, with over US$400 million in assets under management (AUM).

Arbitrum Integration

The expansion to Arbitrum, Ethereum’s largest Layer-2 blockchain, is a strategic move to empower Franklin Templeton’s asset management capabilities using blockchain technology. Roger Bayston, Head of Digital Assets at Franklin Templeton, emphasized the importance of this partnership, stating that it will “liberate opportunities for our firm and our clients.”

The Tokenisation Wars

The FOBXX fund is not the only player in the tokenised treasury market. BlackRock’s BUIDL fund has joined the market, leading with over US$500 million in AUM, or 28.4% market share. US Yield Coin (USYC) and US T-Bill (USTB) follow closely, according to data from Dune. Franklin Templeton ranks third as the largest tokenised government securities protocol, with over US$400 million in AUM.

Institutional Demand for Crypto Assets

Franklin Templeton’s expansion to Arbitrum is a testament to the growing demand for crypto assets among institutional investors. The company has also launched a Bitcoin ETF (EZBC) and an Ethereum ETF (EZET), amassing US$380 million and US$22 million in AUM, respectively. This trend is not limited to the US, as many countries have launched Bitcoin and Ethereum ETFs to emulate their early success.

A Growing Market

The tokenised treasury market is growing rapidly, with many players entering the space. The demand for crypto assets is driven by institutional investors seeking to diversify their portfolios and gain exposure to the growing cryptocurrency market. As the market continues to evolve, it will be interesting to see how Franklin Templeton’s expansion to Arbitrum will impact the adoption of blockchain technology in the financial sector.

Australia’s Bitcoin ETF Market

In Australia, Bitcoin ETFs are seeing significant inflows despite the uncertainty and chaos in the market. This trend highlights the growing demand for crypto assets among institutional investors in the region. As the market continues to grow, it will be interesting to see how Franklin Templeton’s expansion to Arbitrum will impact the adoption of blockchain technology in the Australian financial sector.