Franklin Templeton Collaborates with Ondo to Issue Tokenized ETF

Franklin Templeton Asset Management has partnered with Ondo Finance to issue tokenized versions of five ETF funds tracking stocks, bonds, and gold, targeting crypto-native investors who use digital wallets instead of traditional brokers.

These funds will operate entirely on-chain, allowing 24/7 trading and integration into the DeFi ecosystem. Ondo will provide liquidity and hold the underlying ETF shares as collateral for the issued tokens.

The tokenized portfolios include: U.S. growth stock fund, large-cap stock fund, gold fund, high-yield corporate bond fund, and income-generating stock strategy. The issuance structure uses a special purpose vehicle (SPV), where Ondo purchases and safekeeps the underlying assets before issuing the corresponding tokens.

The tokenized assets include: U.S. growth stock fund, large-cap stock fund, gold fund, high-yield corporate bond fund, and income-generating stock strategy. The issuance structure uses a dedicated legal entity (SPV), in which Ondo acquires and holds the underlying assets before issuing the tokens.

Franklin Templeton is considered a pioneer in tokenization since 2021 with its OnChain U.S. Government Money Fund (BENJI) — currently the fourth-largest on-chain government bond product, managing over $1 billion in assets.

This new move marks a significant expansion into tokenization, amid many major financial institutions accelerating strategies to bring real-world assets (RWA) onto the blockchain.

Initially, the tokenized ETFs will be launched in Europe, Asia-Pacific, the Middle East, and Latin America. Meanwhile, the U.S. Securities and Exchange Commission continues to affirm that on-chain securities assets remain within the scope of existing securities laws.

Currently, Franklin Templeton manages approximately $1.7 trillion in assets, while Ondo Finance reports around $620 million in total value locked (TVL).