Franklin Templeton's tokenized high-yield bond product launches on Pendle, enabling on-chain yield trading.

October 14: According to official sources, FLHYon, the tokenized version of Franklin Templeton's high-yield corporate bond ETF FLHY, has launched on Pendle, offered by Ondo, with a maturity date of December 10, 2026. The ETF is actively managed, with over 80% of assets allocated to high-yield corporate bonds, holdings diversified across more than 250 investment targets, and monthly income distributions. Users can convert USDC to FLHYon through Ondo, then trade principal tokens (PT), yield tokens (YT), or liquidity pools (LP) on Pendle, enabling on-chain split trading of principal and yield, and can exit positions before maturity.

Chetan Karkhanis, Senior Vice President at Franklin Templeton responsible for innovation research and technology business in the Asia-Pacific region, said in a Pendle interview that the company began researching blockchain as early as 2014 to 2015, viewing it as an investment opportunity and financial infrastructure. Traditional fund operations involve extensive record-keeping work such as subscriptions, redemptions, settlements, pricing, and registration, while distributed ledgers are expected to significantly reduce related costs. As a result, the company launched the Benji tokenization platform between 2015 and 2016, gradually building a business system covering digital wallets, order management, portals, and digital ledgers. Currently, Benji covers multiple blockchain networks, and its tokenized funds include products in markets such as the United States, Luxembourg, Singapore, and the British Virgin Islands.

Regarding the development direction of tokenized assets, Karkhanis believes that market demand is extending from short-duration products such as money market funds with yields close to the Secured Overnight Financing Rate (SOFR) to richer yield assets, including bonds and ETFs. The potential advantages of tokenized assets include not only issuance and settlement efficiency, but also intraday yield accrual, peer-to-peer transfers, and participation as collateral in on-chain financial activities. Regarding the prospects of tokenized funds entering DeFi, he stated that structured products, vaults, and looping strategies are expected to improve capital utilization, but when targeting retail investors, risk disclosure, independent ratings, and transparency of underlying assets will become key regulatory focuses.

In the Asia-Pacific market, Karkhanis believes that Singapore and Hong Kong have relatively clear regulatory frameworks, while South Korea and Japan are subsequent key markets of interest for the company. He pointed out that for tokenized real-world assets (RWA) to move from their current scale to trillions of dollars, accelerated adoption by trading platforms, corporate treasury departments, and large traditional financial institutions is needed, while also promoting the development of assets such as tokenized commodities, equities, and bonds. As the number of tokenized funds continues to increase, the focus of industry competition is shifting from product issuance to practical application and scaled adoption. Pendle, for its part, believes that bringing high-yield corporate bonds and tokenized funds into the on-chain yield trading system is expected to create new DeFi use cases for traditional assets and gradually attract more liquidity.