Franklin Templeton, with $1.7 trillion in assets under management, has announced a partnership with Ondo Finance to tokenize its ETFs and traditional investment products, offering them to on-chain users via blockchain. This collaboration marks a significant milestone in the deep integration of traditional financial institutions and crypto infrastructure.

Structure: SPVs Hold ETFs, Tokens Track Underlying Asset Value

The core platform for this partnership is Ondo Global Markets, an on-chain tokenization market launched by Ondo Finance in September 2025. The operational model involves Ondo establishing a Special Purpose Vehicle (SPV) to purchase Franklin Templeton's ETFs, and then issuing on-chain tokens that track the underlying assets. Holders can store these tokens in their digital wallets and gain economic exposure to the ETFs without needing to open traditional brokerage accounts.

Currently, the Total Value Locked (TVL) in Ondo Global Markets has exceeded $620 million, with a cumulative trading volume of over $12 billion and more than 60,000 users. The primary demand comes from crypto-native users who wish to access traditional markets but are constrained by cross-border account opening procedures, exchange costs, or trading hour limitations.

ETF Analyst: Tokenization is a Distribution Mechanism for ETFs, Not a Threat

Bloomberg Senior ETF Analyst Eric Balchunas commented that tokenization is not a competitive threat to ETFs, but rather a new distribution mechanism—allowing on-chain users to enjoy the benefits of low-cost passive index investing. While traditional markets are limited by operating hours and intermediaries, blockchain systems operate around the clock, allowing direct asset ownership via wallets.

Major Asset Managers Race to Enter the Space, Regulatory Clarity Still Pending

This partnership echoes the tokenized fund initiatives of institutions like BlackRock, indicating that top asset managers are actively testing blockchain distribution channels. Both companies also plan to launch educational courses to help crypto-native users understand long-term portfolio strategies.

However, the regulatory framework for tokenized securities remains incomplete. When tokens circulate cross-border between wallets rather than through brokerages, regulatory bodies in various countries have yet to clearly define their legal status—this will be a key variable in determining whether tokenized assets can achieve large-scale adoption. BlackRock CEO Larry Fink also recently pointed out that tokenization has the potential to make investing as simple as making a payment, but the speed at which regulations catch up will determine whether this vision can be realized in the near future.

Disclaimer: None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy.