Franklin Templeton is teaming up with Ondo Finance to launch tokenized versions of its exchange-traded funds, opening a new route for investors to access traditional market exposure through crypto wallets instead of brokerage accounts.
According to Bloomberg, the offering will start outside the United States, with the products set to roll out across Europe, Asia-Pacific, the Middle East, and Latin America. Franklin said access in the U.S. will depend on further regulatory clarity over how third parties can distribute registered funds on-chain.
A New Route into Fund Markets
Under the structure, Ondo will buy shares in Franklin Templeton ETFs and issue tokens through a special-purpose vehicle. Those tokens will give holders exposure to the funds’ returns rather than direct ownership of the underlying ETF shares, allowing the tokens to be used in ways conventional fund shares cannot, including as collateral or in decentralized finance applications.
The model also extends access beyond the usual market timetable. While ETFs themselves trade during standard exchange hours, the tokenized versions are designed to be available around the clock through crypto wallets, with liquidity supported by Ondo’s market makers even when stock and bond markets are closed.
Five Funds in the First Rollout
The initial batch is expected to include five Franklin Templeton funds spanning U.S. equities, fixed income, and gold. The lineup includes FFOG, FLQL, FGDL, FLHY and INCE, giving the launch a mix of growth, income, bond, and commodity exposure.
For now, the biggest limit remains regulation. Franklin said U.S. distribution will have to wait until there is clearer guidance on the treatment of on-chain fund distribution. Still, the partnership suggests large asset managers see tokenization not simply as a technology experiment, but as a possible new distribution channel for mainstream financial products.
Franklin Templeton Deepened Its Digital Asset Strategy With Binance
Franklin Templeton also widened its blockchain push last February through a new institutional collateral program launched with Binance.
The initiative allows eligible institutional clients to use tokenized money market fund shares issued via Franklin’s Benji platform as off-exchange collateral for trading on Binance.
Under the structure, the underlying assets remain in custody through Ceffu, while a mirrored value is reflected within Binance’s trading system.
The model is aimed at reducing counterparty risk while allowing the assets to keep generating yield. It also shows how Franklin is extending tokenized traditional products into new institutional use cases within crypto markets.
