Franklin Templeton Gets SEC Clearance for Funds to Hold Tokenized Assets
U.S. Treasuries
Franklin Templeton has received a no-action letter from the SEC, allowing its traditional investment funds to hold shares of its blockchain-based Franklin OnChain U.S. Government Money Fund. This regulatory relief, issued on August 12, permits the firm to utilize its own investor services as a custodian for these tokenized assets under specific conditions. By integrating the BENJI-tokenized fund into conventional portfolios like mutual funds and ETFs, Franklin Templeton aims to enhance cash management precision and improve yield generation. The firm expects to begin implementing this structure as early as the fourth quarter, pending individual fund board approvals. This development marks a significant step in bridging the gap between traditional finance and blockchain-based recordkeeping. The OnChain fund, which operates on the Stellar blockchain, currently manages nearly $2 billion in assets. This move signals a broader institutional shift toward using tokenized money market funds as efficient collateral and liquidity tools within established financial products.
Key points
- ▸SEC issued a no-action letter allowing Franklin funds to hold BENJI tokenized assets.
- ▸Implementation of tokenized assets in conventional portfolios could begin in Q4.
- ▸Franklin OnChain U.S. Government Money Fund utilizes the Stellar blockchain for recordkeeping.
- ▸The initiative aims to improve cash management and yield for traditional investment funds.
Background
Franklin Templeton is a global investment manager that launched the OnChain U.S. Government Money Fund in 2021. The fund uses blockchain technology to record transactions and shareholder information, offering features like hourly net asset value calculations and intraday trading. It represents one of the earliest examples of a major asset manager tokenizing a regulated money market fund.
Relevance
9/10