SEC clears Franklin Templeton funds to use onchain BENJI system for cash management
Franklin Templeton received a no-action letter from the SEC enabling its traditional registered funds to invest in its BENJI/FOBXX fund.
Franklin Templeton has received a no-action letter from the U.S. Securities and Exchange Commission, clearing the way for its traditional registered investment funds to invest in its own blockchain-based BENJI system, specifically through the Franklin OnChain U.S. Government Money Fund, known as FOBXX. The regulatory relief allows the asset manager's conventional funds to use the onchain product as part of their cash management operations.
FOBXX, which trades under the BENJI token on public blockchains, was launched by Franklin Templeton in 2021 and represents one of the earliest tokenized money market funds registered with the SEC. The fund invests primarily in U.S. government securities and uses blockchain technology to record share ownership. A no-action letter from the SEC indicates that agency staff will not recommend enforcement action against the company for proceeding with the described activity, effectively providing a regulatory green light.
The development marks a notable step in the integration of tokenized assets into traditional fund structures. It signals growing regulatory comfort with allowing conventional registered funds to interact directly with onchain financial instruments, a barrier that has previously limited the broader adoption of tokenized products within institutional portfolio management.
Market observers will be watching whether the SEC's position on Franklin Templeton's BENJI system sets a precedent that could encourage other major asset managers to seek similar no-action relief for their own tokenized fund products.
Source: The Block
