Highlights:
- Franklin Templeton joins Coinbase’s Base, expanding access to its OnChain Fund, and signaling digital finance growth.
- Base Blockchain, now with $8B in locked value, gains traction as investors seek fast, low-cost transactions.
- Franklin Templeton faces an SEC probe and experiences major outflows as new leadership focuses on alternative investments.
Franklin Templeton has made its OnChain U.S. Government Money Market Fund (FOBXX) available on Coinbase’s layer-2 blockchain, Base. This move makes Base the sixth blockchain on which the fund can be traded. The fund’s shares are also available on Arbitrum, Polygon, Avalanche, Aptos, and Stellar, with Stellar serving as the main public blockchain.
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According to Anthony Bassili, Coinbase’s head of tokenization, Franklin Templeton’s decision to join Base signals strong potential for future growth in digital asset investments.
Base went live in 2022, marking Coinbase’s venture beyond traditional crypto exchanges. In recent quarters, Base has become a fast-growing part of Coinbase’s operations. In the third quarter, transactions on Base surged by 55% compared to the previous quarter.
News 🚨
Franklin Templeton’s $410M OnChain Money Market Fund is now officially launched on Coinbase’s Base.#FranklinTempleton #Coinbase #OnChain #MoneyMarketFund #CryptoNews #Blockchain #DeFi #Web3 pic.twitter.com/BAQGKEYwJg
— Web3insights.io (@Web3insightsio) October 31, 2024
This increase underscores investor interest in the speed and efficiency offered by layer-2 solutions like Base. Data from L2Beat shows that Base currently holds over $8 billion in total value locked. Only Arbitrum surpasses Base in the layer-2 blockchain ecosystem.
Base Blockchain Growth Attracts Investor Interest
Layer-2 blockchains, such as Base, offer faster and cheaper transactions than Ethereum’s main blockchain. This advantage makes them popular for financial products like Franklin Templeton’s FOBXX. The OnChain Money Market Fund was launched in 2021, marking a first in using a public blockchain to record transactions.
With a market cap of $410 million, FOBXX is now the second-largest tokenized fund. Franklin Templeton is among a rising list of financial companies seeking to transition with the use of blockchain solutions. According to Bassili, there is an increasing trend of institutions adopting low-cost blockchain technology for their digital transformation.
Financial Challenges Amid SEC Probe
Despite its digital expansion, Franklin Templeton faces financial issues. Recently, the firm reported the worst quarter for outflows in its history. In August, the company announced that the co-chief investment officer of its subsidiary, Western Asset Management, was put on leave.
The U.S. Securities and Exchange Commission (SEC) is investigating the subsidiary over alleged trading violations. These issues have reduced the confidence of investors and led to a high rate of outflows. Western Asset Management suffered a net outflow of nearly $24 billion in September.
Franklin Templeton CEO says the firm is "making sure that we do right by our clients," after being hit by major outflows from big clients after an SEC probe into its Western unit. @dan_murphy @fiiksa. pic.twitter.com/9RUtF0xVFz
— CNBC Middle East (@CNBCMiddleEast) October 30, 2024
Overall, the unit suffered a $37 billion outflow during the last three months. Fixed income funds that constitute approximately 33% of Franklin Templeton’s assets have continued to drag the firm’s performance for the last few years.
New COO to Lead Alternative Investments Strategy
Recently, Franklin Templeton appointed George Stephan as the new Global Chief Operating Officer of Wealth Management Alternatives. He will lead product innovation, investor services, and business operations. Stephan will also provide support for the global distribution strategy of the firm.
Franklin Templeton, a global investment management organization has appointed George Stephan to the newly created position of global chief operating officer of wealth management alternatives.
Reporting to Adam Spector, Franklin Templeton’s executivehttps://t.co/h1e6RnLcuN
— Mergers&Acquisitions (@TheMiddleMarket) October 31, 2024
His responsibility involves analyzing alternative investment products and private wealth channels. Franklin Templeton, the largest alternative asset manager, manages $1.65 trillion of assets, of which 16% is in alternative assets. Among the firm’s alternative asset offerings are private credit, real estate debt, private equity, and pre-IPO growth equity.
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