Franklin Templeton has received approval from the Luxembourg Regulatory Authority (CSSF) to launch the first fully tokenized UCITS fund on a public blockchain.
It will be the first fund of this type for an asset manager based in Europe.
Franklin Templeton is driving the fintech world on blockchain
Franklin Templeton is a company from the United States, founded in New York in 1947, but also active in Europe. Now headquartered in California, it has more than $1.6 trillion in assets under management.
In particular, its subsidiary Franklin Resources, listed on the New York Stock Exchange with the ticker BEN, is involved in investment management in more than 150 countries.
Franklin Templeton’s mission is to help its clients achieve better results through expertise in investment management, asset management and technology solutions. In fact, it offers specialization on a global scale, with solutions for fixed income, equities, alternative investments and multi-asset solutions.
It has more than 1,500 investment professionals and offices in major financial markets around the world.
In addition, its subsidiary Franklin Templeton Digital Assets Services (FTDAS) has been active in the digital asset ecosystem since 2018 and involved in creating technological solutions based on blockchain and developing investment strategies in this sector.
The first Franklin Templeton fund tokenized on blockchain
The on-chain fund will be supported by a robust ecosystem of digital assets and aims to unlock new benefits and use cases for clients as technology adoption of these new technologies increases.
FT Digital Assets will be the first asset manager in Europe to launch a tokenized fund on a public blockchain using in-house capabilities and proprietary technologies.
The fund’s launch is expected in the coming months, and the shares will be issued using Franklin’s proprietary blockchain transfer-enabled platform.
This initiative underlines Franklin Templeton’s belief that Web3 and digital technologies have the potential to reshape the asset management industry.
The Luxembourg regulator, Commission de Surveillance du Secteur Financier (CSSF), has approved the market launch of this fully tokenized UCITS fund.
In April, three years ago, Franklin Templeton had already launched the first U.S. registered mutual fund that used a public blockchain to process transactions and record share ownership: the Franklin OnChain US Government Money Fund2.
Tokenization: all the benefits
The advantage of using tokens on blockchain is that the latter, if decentralized, is a digital ledger that records and verifies transactions in a secure, transparent, immutable and publicly verifiable manner for everyone.
Furthermore, it enables peer-to-peer transactions without intermediaries, ensuring all data is permanently recorded and visible to all. Traditional centralized solutions, on the other hand, are more vulnerable to security breaches and impose greater administrative burdens on those who manage them.
The benefits of tokenization of assets are primarily the ability to access greater liquidity, as it increases the accessibility of financial products to a wider audience, in addition to the possibility of compounding and, of course, transparency.
The comments
The head of digital asset advisory services at Franklin Templeton, Sandy Kaul, stated:
“We want to be recognized as leaders in developing innovative solutions that meet our customers’ needs for business growth, operational efficiency and scalable best practices. Disruptive technology and innovation in financial services are reshaping the industry and changing the fundamental rules for attracting, protecting and serving customers. We believe there may be opportunities in the future to create other tokenized financial products, including interoperability with other digital assets and native blockchain structures. We are committed to continuing to explore these opportunities as part of our broader digital resources strategy.”
The head of Franklin Templeton Digital Assets, Roger Bayston, added:
“We have been active participants and builders in the digital asset ecosystem since 2018 and have witnessed firsthand the transformative power of blockchain technology. As technological innovation continues at a steady pace, we continue to work closely with regulators around the world to bring innovative solutions to the market. By leveraging our deep knowledge of blockchain ecosystems and proprietary technologies, we are well positioned to introduce products that serve to increase the understanding and accessibility of digital resources within the broader community.”
Franklin Templeton’s Head of Americas, Europe and Britain, Matt Harrison, concluded by saying:
“This new fund will mark a fundamental step in our global commitment to leverage blockchain technology for clients outside the United States. We continually focus on innovation and creating long-term value for our customers, and we want to equip them with tools, services and knowledge to make informed decisions. With our proprietary solutions, we provide greater security, transparency and efficiency, further consolidating our leadership in the rapidly evolving digital assets space.”