SEC approves Franklin Templeton’s blockchain fund operations

The SEC has approved Franklin Templeton’s use of blockchain-based money market funds for cash management, enabling faster transactions and modernized fund operations.

The U.S. Securities and Exchange Commission's Division of Investment Management has issued no-action letters permitting Franklin Templeton's registered funds to use its onchain money market funds, including FOBXX and BENJI, for cash management and securities lending collateral. These exemptions allow Franklin Templeton to custody and record ownership of fund shares using blockchain-integrated systems, bypassing certain traditional rules designed for physical securities. The SEC’s decision enables operational benefits such as intraday trading, hourly net asset value calculations, and faster transaction processing. The BENJI fund, launched in 2021 and operating primarily on the Stellar network, currently manages about $726 million in assets. While the SEC's letters confirm permission for blockchain-based cash management, some operational specifics remain undisclosed. This regulatory relief marks a significant step in integrating blockchain technology into traditional asset management.