BlockBeats news, on October 14, according to official announcements, the tokenized version of Franklin Templeton’s high-yield corporate bond ETF, FLHY—named FLHYon—is now live on Pendle, powered by Ondo, with a maturity date of December 10, 2026. This actively managed ETF allocates over 80% of its assets to high-yield corporate bonds, diversified across more than 250 underlying securities, and distributes income monthly. Users can exchange USDC for FLHYon via Ondo, then trade principal tokens (PT), yield tokens (YT), or liquidity pools (LP) on Pendle to split and trade principal and yield on-chain, and exit their positions before maturity.
Chetan Karkhanis, Senior Vice President at Franklin Templeton and head of innovation research and technology for Asia-Pacific, said in a Pendle interview that the company began exploring blockchain as early as 2014–2015, viewing it as both an investment opportunity and a financial infrastructure. Traditional fund operations involve extensive record-keeping for subscriptions, redemptions, settlement, pricing, and registration, and distributed ledger technology has the potential to significantly reduce these costs. As a result, the company launched the Benji tokenization platform between 2015 and 2016, gradually building a business ecosystem encompassing digital wallets, order management, portals, and digital ledgers. Today, Benji operates across multiple blockchain networks and offers tokenized funds in markets including the United States, Luxembourg, Singapore, and the British Virgin Islands.
Regarding the future direction of tokenized assets, Karkhanis believes that market demand is evolving from short-duration products such as money market funds with yields close to the Secured Overnight Financing Rate (SOFR) toward a broader range of yield-generating assets, including bonds and ETFs. The potential advantages of tokenized assets extend beyond issuance and settlement efficiency to include intraday yield accrual, peer-to-peer transfers, and the ability to use them as collateral in on-chain financial activities. On the prospect of tokenized funds entering DeFi, he noted that structured products, vaults, and cyclical strategies have the potential to enhance capital efficiency; however, when targeting retail investors, risk disclosures, independent ratings, and transparency of underlying assets will remain key regulatory priorities.
In the Asia-Pacific market, Karkhanis believes that Singapore and Hong Kong have relatively clear regulatory frameworks, while South Korea and Japan are the next key markets of focus for the company. He noted that for tokenized real-world assets (RWA) to scale from their current size to trillions of dollars, there needs to be accelerated adoption by trading platforms, corporate treasury departments, and large traditional financial institutions, alongside the development of tokenized commodities, equities, and bonds. As the number of tokenized funds continues to grow, industry competition is shifting from product issuance to practical applications and large-scale adoption. Pendle believes that introducing high-yield corporate bonds and tokenized funds into on-chain yield trading systems has the potential to create new DeFi use cases for traditional assets and gradually attract more liquidity.