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This is article 2 of a 4-part series co-authored by Franklin Templeton and Animoca Brands. 

Franklin Templeton and Animoca Brands have entered into a strategic collaboration to explore and facilitate institutional adoption of tokenized real-world assets, and each party may derive financial or other benefits from the relationship.

The co-authored article series reflects the parties’ opinions on tokenization, real-world assets and the development of financial infrastructure. This article series is for informational and educational purposes only and should not be construed as investment advice, endorsement, recommendation or assessment by Franklin Templeton of Animoca Brands or NUVA, its holdings, or its suitability as an investment. Nothing in this material constitutes an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase or sell any security or other investment.

 

Introduction

This article focuses on the factors that have brought the industry to this inflection point and presents a framework for understanding how blockchain technology is reshaping traditional relationships between assets, money, and infrastructure, and redefining the scope and roles of industry participants.

Read Other Articles in This Series

Article 1: Tokenization, RWAs, and the Future of Finance

The first article considers the strategic significance of tokenization for the industry and for investors, situating the convergence of decentralized and traditional finance within the broader dynamics of blockchain, artificial intelligence, Web3, and the evolving trajectory of the global economy and investing.

Read this article

Article 3: What Tokenization Means for Assets: Understanding Demand for Tokenized Assets and the Drivers of Widening Adoption

The third article examines what tokenization changes for assets and portfolios, what drives demand for tokenized assets, and why tokenization alone is not enough to generate adoption or liquidity. It explores the shift from real-world assets toward the real-world benefits they can provide, and the conditions required for tokenized markets to function at scale.

Read this article

Article 4: Institutional Grade Solutions – coming soon

The fourth and final article describes a potential institutional solution to many of the issues explored throughout the series. It examines how NUVA seeks to bridge decentralized and traditional finance through on-chain vaults, primary and secondary liquidity mechanisms, broader access to institutional-grade real-world assets, and an institutional control architecture spanning people, code, and operations.

DISCLOSURE

This report has been jointly prepared and is published by Animoca Brands Research and Franklin Templeton for informational and educational purposes only.

The views expressed in this report are for general purposes only and are not intended to guide investment choices or serve as a substitute for legal, financial, or other professional advice. This report does not take into account any particular circumstances or objectives of the reader. Nothing in this report constitutes, or is to be construed as, an offer, invitation, solicitation or recommendation to buy, sell or subscribe for any security, any interest in any fund or collective investment scheme, any cryptocurrency or digital asset, or any other product or service, or to engage in any investment activity, in any jurisdiction.

References in this report to any specific fund, company, product or service are for illustrative purposes only and do not constitute an offer or recommendation of that fund, product or service; any fund referred to in this report is offered only pursuant to its official offering documents and only in jurisdictions in which it is authorized or registered for distribution. Assets, instruments or funds referred to in this report may not have been authorised by a regulatory authority for the public.

An investment in a money market fund is not a bank deposit and is not insured or guaranteed by any government or government agency, and it is possible to lose money by investing in such a fund. This report is not directed at, and may not be distributed to or relied upon by, any person in any jurisdiction where such distribution or use would be contrary to applicable law or regulation. Redistribution or reproduction without our written consent is prohibited. This report is not intended to guide investment choices in respect of the acquisition, holding, or disposition of any cryptocurrency (or digital asset) or serve as a substitute for legal, financial, or other professional advice. Cryptocurrencies and digital assets carry inherent risks; always conduct your own research before making any investment decisions.

Discussions in this article may be theoretical in nature and are intended to explore the future potential of developing infrastructure and technologies. The concepts, technologies, and activities discussed may not develop or materialize as described. This information is provided for educational and informational purposes only.

Blockchain technology represents a new and rapidly evolving industry which is subject to regulatory uncertainty, competitive pressures, security risk, limited performance history and volatility. Digital Assets and Cryptocurrencies are highly speculative investments that are subject to significant risks. Cryptocurrency investments are subject to various risks, including inability
to develop digital asset applications or to capitalize on those applications, theft, loss, or destruction of cryptographic keys, the possibility that digital asset technologies may never be fully implemented, cybersecurity risk, conflicting intellectual property claims, and inconsistent and changing regulations.

Accordingly, readers should consider the appropriateness of the information in this report and, if necessary, seek professional advice. Any decisions based on this report are solely the reader’s responsibility. The authors of this report, as well as Animoca Brands Research, Franklin Templeton and their respective affiliates, may hold positions in the securities, funds, cryptocurrencies or digital assets mentioned in this report.

This report has been jointly authored by contributors from Animoca Brands Research and Franklin Templeton. The views expressed are those of the authors as at the date of publication and do not necessarily reflect the views of Animoca Brands, Franklin Templeton, or any of their respective affiliates. Where this report includes data, analysis, or commentary provided by other third parties, any such views or opinions are solely those of the respective third parties, and we make no endorsement of those views or opinions.

While we strive to present accurate information, neither Animoca Brands Research nor Franklin Templeton has independently verified the information contained herein (including information presented in third-party contributions) and we make no guarantees nor assume any responsibility regarding its completeness or accuracy. You should undertake independent verification of any information or statement made in this report. Any information contained in this report is based on information that is publicly available, and any views expressed are held, in each case, at the time of publication. All information and views set out in this report are subject to change without notice and neither Animoca Brands Research nor Franklin Templeton is obligated to update this report for any reason nor notify you of any changes to this report. Animoca Brands Research, Franklin Templeton and their affiliates make no guarantee, representation or warranty as to any aspect of this report and Animoca Brands Research, Franklin Templeton and their affiliates disclaim any liability arising from the use of this report. This report may contain forward-looking statements, which are based on current expectations and assumptions and are subject to known and unknown risks and uncertainties; actual events or results may differ materially from those expressed or implied. Past performance is not indicative of future results. The information presented in this report is not intended to be a forecast of future events or a guarantee of future results.

This document is intended to be of general interest only. This document should not be construed as individual investment advice or offer or solicitation to buy, sell or hold any shares of fund. The information provided for any individual security mentioned is not a sufficient basis upon which to make an investment decision. Investments involves risks. Value of investments may go up as well as down and past performance is not an indicator or a guarantee of future performance. The investment returns are calculated on NAV to NAV basis, taking into account of reinvestments and capital gain or loss. The investment returns are denominated in stated currency, which may be a foreign currency other than USD and HKD (“other foreign currency”). US/HK dollar-based investors are therefore exposed to fluctuations in the US/HK dollar / other foreign currency exchange rate. Please refer to the offering documents for further details, including the risk factors.

The data, comments, opinions, estimates and other information contained herein may be subject to change without notice. There is no guarantee that an investment product will meet its objective and any forecasts expressed will be realized. Performance may also be affected by currency fluctuations. Reduced liquidity may have a negative impact on the price of the assets. Currency fluctuations may affect the value of overseas investments. Where an investment product invests in emerging markets, the risks can be greater than in developed markets. Where an investment product invests in derivative instruments, this entails specific risks that may increase the risk profile of the investment product. Where an investment product invests in a specific sector or geographical area, the returns may be more volatile than a more diversified investment product. Franklin Templeton accepts no liability whatsoever for any direct or indirect consequential loss arising from use of this document or any comment, opinion or estimate herein. This document may not be reproduced, distributed or published without prior written permission from Franklin Templeton.

Any share class with “(Hedged)” in its name will attempt to hedge the currency risk between the base currency of the Fund and the currency of the share class, although there can be no guarantee that it will be successful in doing so. In some cases, investors may be subject to additional risks.

Please contact your financial advisor if you are in doubt of any information contained herein.

For UCITS funds only: In addition, a summary of investor rights is available from here. The fund(s)/ sub-fund(s) are notified for marketing in various regions under the UCITS Directive. The fund(s)/ sub-fund(s) can terminate such notifications for any share class and/or sub-fund at any time by using the process contained in Article 93a of the UCITS Directive.

For AIFMD funds only: In addition, a summary of investor rights is available from here. The fund(s)/ sub-fund(s) are notified for marketing in various regions under the AIFMD Directive. The fund(s)/ sub-fund(s) can terminate such notifications for any share class and/or sub-fund at any time by using the process contained in Article 32a of the AIFMD Directive.

For the avoidance of doubt, if you make a decision to invest, you will be buying units/shares in the fund(s)/ sub-fund(s) and will not be investing directly in the underlying assets of the fund(s)/ sub-fund(s).

This document is issued by Franklin Templeton Investments (Asia) Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong.

Unless stated otherwise, all information is as of the date stated above. Source: Franklin Templeton.

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