Franklin Templeton, JP Morgan AM want tokenized fund KYC on par with stablecoins

The newly formed Coalition for Tokenized Markets (CTM), featuring major asset managers including Franklin Templeton, JP Morgan Asset Management, Janus Henderson, and WisdomTree, has formally petitioned the U.S. Treasury and FinCEN to modernize KYC requirements for tokenized funds. The coalition argues that current regulatory frameworks place tokenized funds at a competitive disadvantage compared to stablecoins, which benefit from the GENIUS Act's provision allowing KYC to occur only during on-boarding and off-boarding. By requesting that tokenized funds be granted similar treatment, the group aims to eliminate the requirement for KYC checks on every individual transaction. This shift is viewed as essential for fostering a level playing field within U.S. capital markets and encouraging broader institutional adoption of blockchain-based financial products. If successful, this regulatory adjustment would significantly reduce friction for investors interacting with tokenized assets across different platforms. The proposal highlights the growing tension between legacy financial regulations and the operational realities of distributed ledger technology. Ultimately, this initiative represents a coordinated effort by industry leaders to align federal oversight with the functional efficiencies of digital assets.