Asset manager giant Franklin Templeton, managing $1.7 trillion, announced on March 25 a strategic partnership with Ondo Finance to bring its mainstream ETFs onto the blockchain. The product uses a Special Purpose Vehicle (SPV) to hold actual ETF shares, issuing corresponding tokenized certificates on-chain. Investors hold beneficial rights rather than direct ownership of the underlying assets.
Structure: SPV On-Chain Tokens and DeFi Composability
The tokenized structure supports 24/7 trading with instant minting, redemption, and secondary market transfers; DeFi integration allows tokens to be used as collateral for lending or liquidity mining; lowered global barriers enable investors to gain exposure to US equities via wallets like Blockchain.com without a traditional brokerage account.
Initial Lineup: Growth, Multi-Factor, and Gold ETFs
First tokens include FFOG (Focused Growth ETF), FLQL (US Large Cap Multifactor Index ETF), along with equity, fixed-income, and gold-related ETFs. Franklin Templeton already has RWA experience through its on-chain government money fund BENJI; Ondo manages about $2.7 billion in tokenized assets. The partnership signals institutional forces fully entering the RWA space.
The product targets non-US markets first: Europe, Asia-Pacific, Middle East, and Latin America. In regions with limited traditional banking, it offers a bank-grade asset allocation channel. If regulatory clarity allows a US return, it could trigger deeper integration between traditional finance and crypto.
Industry Context: Institutions Double Down on Tokenization
BlackRock CEO compared tokenization to the 1996 internet in his annual shareholder letter; the World Gold Council released a tokenized gold framework with BCG; Nasdaq partnered with Kraken on a stock tokenization gateway expected by H1 2027. The tokenization trend is moving from concept to scalable adoption.