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      Franklin Templeton Secures SEC Approval for Tokenized Assets in Investment Funds

      Franklin Templeton has received clearance from the SEC to incorporate tokenized assets into its traditional investment funds. This approval allows the asset manager to utilize its BENJI tokenized money market fund for cash management and collateral across its conventional investment offerings.

      The SEC's Division of Investment Management issued a no-action letter on August 12, indicating it would not recommend enforcement action against Franklin funds that invest in the Franklin OnChain U.S. Government Money Fund, provided certain conditions are met. This decision enables Franklin funds to leverage the OnChain Fund for cash balances and securities lending collateral, potentially integrating tokenized assets into ETFs and mutual funds.

      The OnChain Fund employs a blockchain-based recordkeeping system, utilizing Stellar as its primary public blockchain. This structure aims to enhance liquidity management through features such as hourly net asset value calculations and faster transaction processing. Sandy Kaul, head of digital assets and innovation at Franklin Templeton, noted that the firm seeks to manage cash more effectively and reduce liquidity requirements.

      Franklin Templeton launched the OnChain U.S. Government Money Fund in 2021, marking it as the first U.S. registered money market fund to adopt a public blockchain for its official record-keeping. As of April 29, the broader BENJI suite had $1.98 billion in assets under management, with plans to introduce additional tokenized products in the future. The firm anticipates that it could start using the tokenized fund in conventional portfolios by the fourth quarter, pending approval from individual fund boards.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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