Intelligence Brief
The US Securities and Exchange Commission has removed a custody obstacle preventing registered investment companies from using Franklin Templeton’s onchain money-market fund for cash management.
The SEC’s Division of Investment Management issued no-action relief covering the Franklin OnChain US Government Money Fund, whose BENJI shares are recorded through blockchain technology. Registered funds may hold the shares without applying physical-custody procedures designed for conventional securities, provided the arrangement continues operating under the representations submitted to the regulator.
The blockchain record does not replace Franklin’s regulated control structure. Franklin Advisers remains the investment manager, while Franklin’s transfer agent controls the relevant blockchain wallets and maintains the official shareholder register. The system therefore uses blockchain as a record-keeping and transaction layer within an established securities framework.
Strategic Assessment
Franklin benefits by making BENJI easier to use inside other regulated funds. Institutional investors gain access to blockchain-recorded cash instruments without taking direct custody of private keys.
The precedent is narrow. It does not grant unrestricted regulatory approval to tokenised funds or allow decentralised custody. Control remains with regulated intermediaries, and Franklin’s transfer agent retains the authoritative ownership record.
That distinction defines the immediate opportunity. Institutions can adopt onchain settlement while keeping familiar compliance, custody and shareholder protections. Fully decentralised products receive no equivalent benefit.
