- Franklin Templeton teams up with Ondo Finance to launch tokenized versions of five exchange-traded funds.
- Investors gain 24/7 access to ETF exposure via blockchain, without relying on traditional brokerage accounts or market hours.
- Ondo acquires ETF shares and issues tokens through a special purpose vehicle, enabling on-chain use and DeFi collateralization.
- Initial rollout targets Europe, APAC, Middle East and LatAm, with potential US access subject to regulatory approval and distribution via Ondo Global Markets.
The asset management giant Franklin Templeton is taking a further step into on-chain finance by collaborating with Ondo Finance to launch tokenized versions of several of its exchange-traded funds. The move aims to blend the familiarity of traditional ETFs with the flexibility of digital assets, opening the door to round-the-clock access to investment exposure through public blockchains.
Instead of being limited to conventional brokerage accounts and standard trading sessions, investors will be able to obtain continuous, 24/7 exposure to Franklin Templeton strategies via blockchain-based tokens. The initiative is designed for users who prefer not to depend on legacy financial rails or market opening hours, without giving up the structure and oversight associated with regulated funds.
How the Franklin Templeton-Ondo Finance tokenized ETF lineup is structured
The partnership centers on an initial suite of five strategies, with Ondo Finance preparing to bring them on-chain as tokenized instruments. The lineup covers equities, commodities and credit, mirroring existing Franklin Templeton ETFs that already trade in traditional markets.
Among the funds included in this first wave are the Franklin Focused Growth ETF (FFOG), the Franklin US Large Cap Multifactor Index ETF (FLQL), the Franklin Responsibly Sourced Gold ETF (FGDL), the Franklin High Yield Corporate ETF (FLHY) and the Franklin Income Equity Focus ETF (INCE). Together, these vehicles span growth-focused US stocks, multifactor large caps, physically backed gold, high-yield corporate bonds and income-oriented equity exposure.
Under the arrangement, Ondo Finance will purchase shares of these ETFs and then issue blockchain tokens linked to those holdings. This is done through a dedicated special purpose vehicle (SPV), which holds the underlying ETF shares while creating a corresponding supply of tokens that trade on-chain.
Holders of these tokens will not directly own the ETF shares themselves. Instead, they obtain economic exposure to the underlying funds, including rights to income generated by the portfolios. In practice, that means investors participate in the performance and distributions of the ETFs, while the legal title to the securities remains with the SPV that Ondo oversees.
This structure is intended to preserve the regulatory and operational framework of traditional funds while making them natively accessible within blockchain ecosystems. For many users, that combination of familiar oversight and on-chain portability may be more attractive than purely crypto-native products.
24/7 access and new DeFi use cases for tokenized ETFs
One of the headline features of this initiative is the promise of around-the-clock availability, regardless of conventional market hours. While the underlying ETFs continue to trade on established exchanges during regular sessions, the tokens representing them can change hands on-chain at any time, in line with the always-on nature of blockchain networks.
This setup enables investors who are more comfortable with digital asset platforms to tap into traditional ETF strategies without opening a brokerage account or waiting for markets to open. For users in regions where access to US-listed products is limited or slow, tokenized versions may offer a more direct route into those exposures.
Beyond straightforward investment, the tokens are also designed to plug into decentralized finance. Ondo’s design allows these tokenized ETF positions to be used as collateral within DeFi protocols, extending their functionality beyond buy-and-hold portfolios and leveraging mechanisms for bringing stock and ETF data on-chain. In practice, that could include using tokenized ETF exposure to back loans, participate in liquidity pools or serve as part of structured on-chain products.
This fits into a broader trend in crypto known as Real World Assets (RWA), where traditional securities and instruments are represented as tokens and integrated into on-chain applications. By making well-known Franklin Templeton products available in tokenized form, the partnership aims to deepen the pool of high-quality collateral in DeFi while maintaining exposure to regulated, off-chain markets.
From a user-experience perspective, the hope is that investors can move more smoothly between different types of assets—for example, rotating from stablecoins into tokenized ETFs and then back again—without leaving the blockchain environment or juggling multiple account types.
Global rollout and regulatory considerations for US investors
The tokenized ETFs are initially being positioned for investors outside the United States. According to the plans outlined so far, the first rollout will focus on Europe, the Asia-Pacific region, the Middle East and Latin America. These markets are seen as early candidates where interest in both ETFs and digital assets has been rising.
Access for US-based investors is not being ruled out, but it will depend on obtaining the necessary regulatory green lights. Until that is resolved, the products are expected to remain targeted at non-US clients, in line with existing rules around the distribution of tokenized securities and cross-border investment products.
Distribution will occur through the Ondo Global Markets platform, which serves as the primary hub for accessing these tokenized instruments. By leveraging this venue, the partners aim to provide a single interface for onboarding, compliance checks and ongoing management of tokenized ETF positions.
In practical terms, investors will likely interact with the tokens through whitelisted wallets or accounts that have completed the required verification steps. This reflects a growing emphasis on combining blockchain-based assets with robust know-your-customer and regulatory controls, particularly when dealing with tokenized versions of regulated funds.
The geographic rollout strategy also underscores how regulation remains a key factor in the pace and direction of tokenization efforts. Markets with clearer frameworks for digital securities can see earlier launches, while others may follow as rules evolve.
Building on Franklin Templeton’s previous on-chain fund experiments
This is not Franklin Templeton’s first encounter with on-chain investment products. Back in 2021, the firm introduced the Franklin OnChain US Government Money Fund (FOBXX), which became one of the earliest US-registered mutual funds to record transactions on a public blockchain.
FOBXX marked a turning point in how traditional asset managers thought about fund administration. By using public blockchain infrastructure to register and track fund shares, Franklin Templeton tested whether core back-office processes could be made more efficient and transparent through distributed ledgers.
The experience gained with that money market-style product has fed into today’s tokenized ETF project. Having already explored the operational and technical aspects of on-chain recordkeeping, Franklin Templeton is now expanding from a single fund use case to a broader ETF suite focused on different asset classes.
At the same time, the firm has continued to explore how digital assets and traditional securities might coexist within the same ecosystem. The partnership with Ondo Finance illustrates a willingness to work with specialized crypto-native platforms to bring mainstream products onto blockchains, rather than trying to build every component in-house.
For the wider asset management industry, Franklin Templeton’s incremental approach – moving from on-chain money funds to a diversified set of tokenized ETFs – offers a real-world template for how tokenization can be rolled out in stages, rather than as a single, all-or-nothing shift.
Ondo Finance’s RWA focus and expanding tokenized asset universe
On the Ondo Finance side, the collaboration fits neatly into the company’s focus on Real World Assets as a core pillar of its strategy. Ondo has positioned itself as a bridge between traditional capital markets and on-chain platforms, with a particular emphasis on tokenizing existing securities and investment products.
According to recent figures, Ondo Finance already manages billions of dollars in tokenized assets spread across multiple offerings. The firm has steadily added tokenized US equities and ETFs to its platform, with the total universe of available assets now numbering in the hundreds.
This scale-up has come alongside a steady increase in total value locked (TVL) on its infrastructure. TVL captures the overall value of assets that are deposited, staked or otherwise engaged within Ondo’s ecosystem, and it has been rising as more tokenized products and use cases come online.
Incorporating Franklin Templeton’s ETF strategies adds another layer to this offering. By working with an asset manager that oversees trillions of dollars in assets under management across various products, Ondo further anchors its RWA push in well-known, large-scale portfolios.
For DeFi participants, the arrival of these tokenized ETFs means a broader menu of underlying exposures that can be integrated into lending markets, structured products or other on-chain strategies. The collaboration, in that sense, is as much about diversifying DeFi collateral as it is about providing a new distribution channel for Franklin Templeton.
Market context: tokenization, ETF growth and investor demand
The Franklin Templeton-Ondo initiative is unfolding against a backdrop of rapid growth in both the global ETF industry and tokenization narratives within crypto. The worldwide ETF market already spans tens of trillions of dollars in assets, covering virtually every region and asset class.
Within that broader landscape, asset managers have begun to ask how much of future ETF demand might come through digital-native channels rather than traditional brokerage accounts. Some industry voices argue that even capturing a small percentage of new ETF flows via tokenized formats could translate into substantial sums moving into on-chain ecosystems.
On the crypto side, tokenization of securities, funds and other real-world instruments has become one of the key themes for institutional adoption. Proponents see it as a way to bring yield-bearing and diversified exposures into DeFi, while regulators and traditional institutions evaluate how best to supervise and integrate these models.
The Franklin Templeton and Ondo collaboration is one of the more visible examples of a large, established asset manager testing the waters of RWA tokenization at scale. It adds ETFs to a list of instruments that have already included money market funds, treasuries and other fixed income products in various tokenized forms across the market.
For investors, the practical impact will likely be measured by how easy it becomes to move between crypto-native positions and tokenized traditional assets, as well as how competitive the costs and liquidity prove to be compared with existing channels.
All told, the partnership between Franklin Templeton and Ondo Finance illustrates how traditional ETFs, blockchain infrastructure and DeFi applications are starting to intersect in more concrete ways. By tokenizing a set of established funds and offering them with 24/7 access, the two firms are testing whether demand for regulated, on-chain exposures can keep pace with the long-running growth of the ETF market itself.
