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🔺What we’re watching: Franklin Templeton, a global investment firm that manages about $1.6 trillion in assets, announced the launch of its Franklin OnChain U.S. Government Money Fund (FOBXX) to the Avalanche network. 

🔺Why it matters: FOBXX is a U.S. registered mutual fund that utilizes the blockchain for processing transactions and ownership sharing. The fund will use BENJI tokens to represent shares of the $420 million fund, which can be used to gain exposure to it through its investment app. 

Institutions like Franklin Templeton have historically been cautious about how they approach crypto and utilizing blockchain technology, given strict regulatory restrictions and guidelines. However, by tokenizing an asset like a government-backed security, this has the opportunity to demonstrate how the benefits of the blockchain can be used in traditional markets in a secure way. 

"Franklin Templeton shares a mutual commitment to developing transformative digital financial products and services that will meet onchain investor demand today and bring off-chain capital and users into the ecosystem tomorrow,” said John Wu, president at Ava Labs.

The blockchain provides transaction transparency and ownership tracking, which in turn showcases the capabilities of traditional finance and decentralized finance under one system. It also incorporates a more accessible platform since BENJI tokens can be traded 24/7 and provide investors a fragment of a multi-million dollar fund. This can give investors access to opportunities that might have been out of reach due to financial or regulatory barriers some countries face.

🔺The bigger picture: Avalanche’s continued efforts to expand its ecosystem of institutional participants and opportunities for all types of investors has the potential to make waves across the traditional and crypto markets.

Franklin Templeton’s move to tokenize assets on Avalanche demonstrates that the blockchain is contributing toward the movement of crypto beyond just a speculatory matter, into practical, real-world financial applications.

As more financial institutions embrace blockchain technology, the adoption of tokenized assets and other categories, both retail and institutional players can continue to dive deeper into the sector, too.

Distribution of L1s by category. Source: Snowpeer

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This information is for entertainment purposes only. It should not be considered financial advice, nor should it be used to make investment decisions. Cryptocurrencies are high risk and you should consult a financial professional before making any financial decisions. Make sure you do your own research.