Franklin Templeton Partners with Ondo Finance to Tokenize Five ETFs for 24/7 Trading

Franklin Templeton, managing $1.7 trillion in assets, partnered with Ondo Finance to tokenize five equity and gold ETFs, enabling round-the-clock trading through digital wallets. The move represents a major institutional push to bring traditional securities on-chain for crypto-native investors.

Franklin Templeton and Ondo Finance Partnership for Tokenized ETFs

• ▪Franklin Templeton and Ondo Finance announced a partnership on Wednesday to offer tokenized versions of five Franklin Templeton exchange-traded funds.
• ▪The tokenized Franklin Templeton ETFs will allow those without traditional brokerage accounts to gain access and trade them around the clock.
• ▪Sandy Kaul is the Head of Innovation at Franklin Templeton.
• ▪Franklin Templeton and Ondo Finance will work together on educational programs designed to showcase how traditional investments will fit in alongside emerging financial ecosystems.
• ▪The five tokenized Franklin Templeton ETFs include Franklin Templeton's high-yield corporate ETF, its focused growth ETF, and its responsibly sourced gold ETF.
• ▪The new tokenized ETF offerings will use Ondo's tokenized securities platform called Ondo Global Markets.

Platform Features and Accessibility Limitations

• ▪Franklin Templeton expanded its Franklin On-Chain U.S. Government Money Fund offering to Ethereum in 2024.
• ▪Ondo rolled out access to more than 100 tokenized U.S. equities on the Ethereum blockchain in September.
• ▪U.S. users are ineligible to make trades on Ondo's Global Markets platform.
• ▪Franklin Templeton debuted its Franklin On-Chain U.S. Government Money Fund on the Stellar network in 2021.
• ▪Ondo Global Markets has established more than $620 million in total value locked since its launch last fall.
• ▪Franklin Templeton has expanded its Franklin On-Chain U.S. Government Money Fund to Polygon, Aptos, Avalanche, Arbitrum, Solana, and Base.

Broader Industry Trend Toward Tokenization of Traditional Securities

• ▪Nasdaq earned SEC approval to test tokenized versions of some securities in a pilot program last week.
• ▪The New York Stock Exchange announced it will collaborate with the BlackRock-backed Securitize for the tokenization of securities one day before the Franklin Templeton and Ondo Finance partnership announcement.

Perspective of Franklin Templeton

• ▪Franklin Templeton views tokenization as a way to provide access to traditional investments for crypto-native investors who may not have brokerage accounts.
• ▪Sandy Kaul stated that the partnership with Ondo Finance represents Franklin Templeton's commitment to meeting investors where they are in the digital economy.

Perspective of Ondo Finance

• ▪Ondo Finance sees tokenized securities as enabling global access to U.S. financial markets for international investors.
• ▪Ian De Bode characterized the Franklin Templeton partnership as validation of Ondo Finance's vision to bring traditional finance on-chain.

Perspective of Traditional finance industry observers

• ▪The clustering of tokenization announcements from Franklin Templeton, NYSE, and Nasdaq suggests a coordinated industry shift toward on-chain securities.
• ▪The Franklin Templeton and Ondo Finance partnership signals that major asset managers are moving beyond pilot programs to production-scale tokenization offerings.

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