SEC Clears Path for Franklin Templeton's Tokenized Assets in Traditional Funds
Franklin Templeton has secured SEC staff relief to integrate its blockchain-based OnChain U.S. Government Money Fund into traditional funds, such as ETFs and mutual funds.
The no-action letter from the SEC's Division of Investment Management allows eligible Franklin funds to invest in the tokenized money market fund for cash balances and securities lending collateral.
Franklin could begin introducing the tokenized fund into conventional portfolios as early as the fourth quarter, with individual fund boards needing approval before adopting the arrangement.
The OnChain Fund uses blockchain recordkeeping while maintaining an official record of shareholder ownership separately. It invests primarily in government securities, cash, and repurchase agreements.