TL;DR:
- Franklin Templeton received a no-action letter from the SEC allowing its funds to invest cash in its own tokenized money market fund.
- The SEC also authorized FTIS to act as custodian of the tokenized funds and hold their private keys without adhering to current physical custody rules.
- The firm manages $2.5 billion in onchain assets and ranks fifth among the largest tokenized asset managers, according to RWA.xyz.
Franklin Templeton received regulatory approval from the U.S. Securities and Exchange Commission (SEC) to allow its funds to invest cash directly in its own tokenized money market fund.
The regulator issued a no-action letter, stating it will not pursue enforcement action if the firm’s managers allocate capital to the Franklin OnChain U.S. Government Money Fund, a tokenized fund that invests in U.S. government securities and aims to maintain a share price of $1.
The fund generates yield and operates on blockchain infrastructure, which sets it apart from traditional money market vehicles. The no-action letter was issued in response to a formal request submitted by Franklin Templeton on the same day.
Franklin Templeton Exempted from Physical Custody Rules
One of the most significant aspects of the decision is the authorization extended to Franklin Templeton Investor Services (FTIS), the firm’s affiliated transfer agent. The regulator will allow FTIS to act as custodian of the tokenized funds and hold their private keys without having to comply with current physical custody rules, a highly significant concession within the current regulatory framework.
The SEC’s letter established 12 conditions that the firm must meet. These include maintaining systems that prevent unauthorized instructions and requiring FTIS to retain the administrative controls needed to correct, freeze, migrate, or restore records as necessary.
Franklin Templeton currently manages $2.5 billion in onchain assets across its tokenized funds, positioning it as the fifth largest tokenized asset manager in the world, according to data from RWA.xyz. The company launched a dedicated crypto division and acquired crypto asset manager 250 Digital in June 2026, as part of its expansion and deepening presence in the tokenization and digital markets industry.
