Franklin Templeton is one of the most prolific asset managers in engaging with blockchain. It was the first incumbent to launch a tokenized money market fund, FOBXX, on a public blockchain back in 2021. Now it has launched a very similar fund, but registered in Luxembourg. The company says it is the first Luxembourg domiciled fully tokenized UCITS SICAV product, the Franklin OnChain U.S. Government Money Fund.

It received approval for the product last October, using its own internal transfer agent infrastructure, that’s enabled with blockchain. Since then, Luxembourg has finalized laws that make the jurisdiction even more attractive for tokenized funds.

The new fund will be available on the Stellar blockchain, as was FOBXX initially. However, since then the US domiciled fund has expanded to seven additional blockchains: Polygon, Aptos, Avalanche, Arbitrum, Ethereum, Solana, and Base. The US version is the third largest tokenized MMF with assets under management of $512 million.

The US version is available to institutional and retail investors, whereas the Luxembourg UCITS is available to institutional investors in Austria, France, Germany, Italy, Liechtenstein, Netherlands, Spain and Switzerland.

“As technological innovation continues at pace, we continue to work closely with regulators around the world to introduce innovative solutions to the marketplace,” said Roger Bayston, EVP, Head of Digital Assets, Franklin Templeton. “Leveraging our in-depth knowledge of blockchain ecosystems and proprietary technologies, we are well positioned to introduce products that serve to further the understanding and accessibility of digital assets within the broader community.”

Other European UCITS activity

Last year, French startup Spiko launched tokenized UCITS funds in US dollars and Euros on six public blockchains. They are available to retail investors, with CACEIS acting as fund administrator and also offering it to clients. For a relatively under-the-radar startup, it has a respectable €161 million in assets under management after just nine months.

Another startup IZNES launched a DLT-based marketplace for UCITS funds in France back in 2017, and is still going strong. Euroclear invested recently.

Given Luxembourg is a key hub for the asset management industry in Europe, it’s not surprising it was home to one of the first DLT fund distribution platforms, FundsDLT, which was founded by the local stock exchange. FundsDLT was subsequently acquired by Deutsche Börse’s Clearstream.