When the lines between traditional finance (TradFi) and decentralized finance (DeFi) become completely blurred, asset liquidity will no longer be limited by geography and time. Franklin Templeton, with assets under management of $1.7 trillion, officially announced a strategic partnership with Ondo Finance on March 25 to bring its mainstream ETF products to the on-chain world.
Product Structure: SPV On-Chain Certificates and DeFi Composability
This tokenized product employs a rigorous legal and technical framework. Ondo Finance holds Franklin Templeton's physical ETF units through a special purpose vehicle (SPV) and issues corresponding token certificates on-chain. While investors hold the right to the returns on these tokens rather than direct ownership of the underlying assets, these tokens possess the advantages of native crypto assets:
- 24/7 Trading: Supports instant minting, redeeming, and secondary market transfers.
- DeFi Integration: These tokens can be used directly as collateral in DeFi protocols for lending or liquidity mining.
- Lower global barriers: Through partner wallets such as Blockchain.com, investors can gain exposure to US stocks without a traditional brokerage account.
The initial lineup: US growth stocks, gold, and fixed income.
The initial wave of tokenized assets launched in this collaboration includes a multi-dimensional investment portfolio, specifically referring to the following assets:
- FFOG: Focused Growth ETF.
- FLQL: US Large Cap Multifactor Index ETF.
- In addition, a range of equity, fixed-income, and gold-related ETF products.
It's worth noting that Franklin Templeton is already a pioneer in the RWA field, having accumulated extensive experience with its on-chain government monetary fund (BENJI); while Ondo Finance currently has approximately $2.7 billion in tokenized assets. The combination of these two is seen as a signal that "regular forces" are taking over the RWA sector entirely.
It's worth noting that this product initially targets non-US markets such as Europe, Asia Pacific, the Middle East, and Latin America. For investors in these regions, this not only shortens the distance to US stocks but also provides a "bank-grade" asset allocation channel in areas lacking traditional banking services. As US regulations become clearer, if this product returns to the US market in the future, it could trigger a comprehensive convergence of traditional asset management and crypto finance.
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