Franklin Wins SEC Relief to Bring Tokenized Cash Into

Franklin Templeton won SEC staff relief that could allow its traditional investment funds to use a blockchain-based money market fund for cash management and collateral, Bloomberg reported.

The relief gives Franklin’s conventional funds a way to invest in the Franklin OnChain U.S. Government Money Fund, known as BENJI. The SEC stressed that the letter is not formal approval and applies only to the specific arrangement and conditions outlined in the request.

Tokenized Cash Gains Ground

The relief would allow Franklin’s funds to use the OnChain Fund to manage cash and provide collateral for securities lending. Franklin expects individual fund boards to approve the arrangements before the funds can begin using it in the fourth quarter.

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The fund records transactions on a blockchain while Franklin maintains the official ownership records. Stellar is its primary blockchain. It calculates its net asset value hourly and allows trading during the day, which Franklin says can give funds faster access to cash and speed up transactions.

Franklin Expands Digital Strategy

Franklin launched BENJI in 2021, using tokens to represent shares. The broader BENJI suite had about $1.98 billion in assets as of April 29, according to the firm.

Franklin has continued expanding its digital-asset business, including its acquisition of 250 Digital. Sandy Kaul, the firm’s head of digital assets and innovation, has said tokenized funds could help managers put cash to work more efficiently while reducing liquidity needs.