SEC clears Franklin Templeton funds to tap onchain BENJI system for cash management
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The U.S. Securities and Exchange Commission’s Division of Investment Management has issued a no-action letter to Franklin Templeton, clearing the way for the firm’s traditional registered funds to invest in its blockchain-based OnChain U.S. Government Money Fund.
Key facts
- In the letter, posted Wednesday, the SEC cites Section 17(f) and Rule 17f-2 of the Investment Company Act of 1940, enabling registered funds to hold shares of the onchain money market fund for cash
- The fund has about $726 million in assets under management, with the majority on Stellar, according to RWA.xyz
- In the letter, the SEC cited a 1992 no-action letter also involving Franklin to justify its decision
- BENJI launched on Steller in 2021 and has since expanded to several blockchains, including Ethereum and Solana
Summary
The U.S. Government Money Fund. In the letter, posted Wednesday, the SEC cites Section 17(f) and Rule 17f-2 of the Investment Company Act of 1940, enabling registered funds to hold shares of the onchain money market fund for cash management without meeting certain physical-vault requirements. "Essentially, it opens the door for Franklin’s registered funds (mutual funds, ETFs, etc) to hold its OnChain fund despite not technically satisfying 1940 Act custody rules," Bloomberg analyst James Seyffart said on X. The decision effectively lets conventional Franklin funds access some of the operational advantages of its OnChain U.S. Government Money Fund (FOB), often called BENJI, including faster transaction processing and more frequent pricing updates.