Franklin Templeton’s OnChain U.S. Executive Money Market Fund (FOBXX) has made a significant move by expanding to the Ethereum blockchain, the world’s second-largest blockchain by market capitalization. This development is expected to increase liquidity and accessibility for investors, as the fund will now be available on a platform with a larger user base.
FOBXX, which launched in 2021 as the world’s first tokenized money market fund on the Stellar blockchain, has already expanded to several other networks, including Avalanche, Aptos, and Coinbase’s Ethereum layer 2 network, Grisly. The fund’s market capitalization currently stands at approximately $410 million, making it the third-largest tokenized money market fund, behind BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) and Ondo’s U.S. Dollar Yield (USDY).
The expansion to Ethereum is a strategic move, as it will allow more investors to access the fund, potentially increasing liquidity and trading volume. Ethereum’s large user base and established ecosystem make it an attractive platform for tokenized assets, and Franklin Templeton’s decision to expand to this network is likely to be seen as a positive development by investors.
FOBXX’s tokenization on a public blockchain allows for the fund to be bought and sold using the supported crypto networks, and enables the immutable storage of transaction records and ownership on-chain. This increases transparency and simplifies record-keeping, making it an attractive option for investors.
According to data from rwa.xyz, a tokenization dashboard, Ethereum is the leading platform for tokenized treasuries, with over $1.6 billion in tokenized assets on the network. Stellar, the second-largest platform, has a significantly smaller amount of tokenized assets, with $393 million, while Solana, the third-largest platform, has $134 million.
The tokenization of real-world assets has emerged as a significant narrative in the crypto space over the past few years, and is expected to be a major driver of the next bull run. If tokenization does play a significant role in the next bull run, it is likely to be beneficial for Ethereum, as the network appears poised to continue its dominance in the tokenization space.
A report by Grayscale, a leading asset manager, published in April, highlighted Ethereum’s potential to lead the tokenization wave. The report noted that Ethereum is “meaningfully decentralized” and “credibly neutral for network participants,” two attributes that will give it the best chance to remain at the forefront of the tokenization wave.
From a crypto markets perspective, while a spread of platforms could potentially make the tokenization trend more decentralized, the protocol that can serve as a unified platform for tokenized assets, investors, and related applications is likely to have the most potential. Currently, Grayscale Research believes that the Ethereum blockchain has the best chance of serving this purpose in the future.
The expansion of FOBXX to Ethereum is a significant development in the tokenization space, and is likely to be seen as a positive move by investors. As the crypto space continues to evolve, it will be interesting to see how tokenization plays out, and whether Ethereum will remain the leading platform for tokenized assets.
