Franklin Templeton Clears SEC Hurdle for Tokenized Assets in Traditional Funds

Franklin Templeton has secured a first-of-its-kind U.S. regulatory clearance to use tokenized assets inside traditional exchange-traded funds (ETFs) and mutual funds, according to Bloomberg.

The firm plans to utilize its Franklin Onchain U.S. Government Money Fund, known as BENJI, which manages about $2.6 billion in assets.

This move could bring blockchain-based holdings into portfolios without requiring investors to buy tokenized products directly.

Franklin's $872 billion fund base could push tokenization deeper into mainstream portfolio management.

The strategy may begin as early as the fourth quarter, pending approval from individual fund boards, following a no-action position granted by the Securities and Exchange Commission (SEC).

Franklin's head of digital assets and innovation, Sandy Kaul, said, 'This is the first time the SEC has said a digitally native product can be used in traditional financial products.'