new opportunities for retail tokens

Franklin Templeton, in collaboration with Jiritsu, launches an advanced verification system for tokenized funds. This innovation aims to democratize access for retail investors, reducing friction in transactions and integrating tokens into DeFi.

Let’s see all the details in this article. 

Blockchain technology and MPC verification: the solution of Jiritsu and Franklin Templeton for the financial market

The financial industry is experiencing a profound transformation thanks to tokenization, and Franklin Templeton is among the pioneers of this revolution. 

The recent integration of a verification system developed by Jiritsu for the tokenized funds EZBC and FOBXX indeed represents an important step forward.

This system, based on the Avalanche network, not only introduces greater transparency but also expands opportunities for retail investors, opening new avenues for the decentralized financial market.

Announced on December 2 by Jiritsu co-founder, Jacob Guedalia, the new system allows asset managers to issue tokens backed by the shares of Franklin Templeton funds. 

This functionality ensures that each token is adequately covered, eliminating the risk of unsupported emissions.

The system uses a multilateral computation network (MPC) to verify in real-time that the funds associated with the tokens are indeed available. According to Guedalia, this approach is fundamental to ensure investor trust:

“You cannot mint a token unless there is a real asset backing it.”

The FOBXX fund has been one of the first examples of advanced tokenization in the sector. Since 2021, its shares have been represented by BENJI tokens on blockchains such as Stellar, Polygon, Arbitrum, Base, and Avalanche. 

However, until now, only registered asset managers could access these opportunities, leaving retail investors excluded.

With the new verification system, Jiritsu aims to overcome this limitation. Retail investors will soon be able to access derivative tokens supported by BENJI, subject to KYC verification through a dedicated web portal. 

These tokens will also be usable in decentralized finance applications (DeFi), expanding investment opportunities.

Advantages for retail investors

Retail tokenization offers numerous advantages for investors. Firstly, it offers simplified access: investors will no longer need to convert fund shares into stablecoins to participate in DeFi. 

The tokens will directly represent the shares, reducing intermediate steps and improving efficiency. Additionally, it allows for higher returns. 

Investors will be able to park their resources in tokenized assets instead of in stablecoin, earning interest while waiting for new market opportunities.

Then, flexibility, or the possibility of using tokens on the blockchain eliminates friction, improving the speed and effectiveness of financial transactions.

Guedalia highlighted that this innovation eliminates one of the main difficulties for investors:

“Having tokens on the blockchain that already represent these actions removes the friction of the system.”

Impact on DeFi and the global market

The expansion of tokenized funds towards the retail public could transform the global financial market. Investors who wish to diversify their portfolio will now have access to innovative and secure instruments. 

This development is not limited to Franklin Templeton: similar funds, such as BlackRock’s BUIDL and ONDO’s USDY, are exploring similar solutions, increasing competitiveness in the sector.

Furthermore, tokenized funds position themselves as an alternative to stablecoins for those who wish to invest in less volatile yet still fruitful assets. 

This combination of safety and yield is particularly attractive for those seeking refuge from the fluctuations of cryptocurrencies.

According to Jiritsu, the retail tokens supported by the Franklin Templeton funds will be available by the end of the year. This represents a significant breakthrough not only for tokenization but for the entire financial ecosystem. 

With the continuous development of blockchain technology and the growing adoption by financial institutions, it is likely that more and more funds will integrate similar systems.

The possibility of integrating tokens into DeFi applications will further strengthen their role as a versatile financial instrument. 

In the long term, this could contribute to a greater democratization of finance, making advanced tools accessible to an increasingly wider audience.