Franklin Templeton Clears SEC Hurdle for Blockchain-Based Funds

Franklin Templeton has received SEC staff relief to hold its $721 million blockchain-based money market fund, Franklin OnChain U.S. Government Money Fund (FOBXX), inside conventional mutual funds and ETFs.

The clearance is seen as a significant milestone for the firm, which plans to tokenize assets within these portfolios.

According to Bloomberg, this marks the first US regulatory clearance for digitally native products inside conventional funds.

The SEC staff set aside three paragraphs of Rule 17f-2 under the Investment Company Act of 1940, specifically those related to vault custody of share certificates.