Franklin Templeton Prepares Institutional Money Market Funds for Tokenized Finance
Franklin Templeton retrofits two Western Asset funds for GENIUS Act compliance and blockchain-based distribution
Franklin Templeton, a global investment leader, today announced that two institutional money market funds managed by its affiliate Western Asset Management are now eligible for use in two major segments of the evolving market for tokenized money market funds: one supporting stablecoin issuers in the regulated stablecoin reserves under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, and the other acting as a distribution product across blockchain-enabled platforms. These changes underscore Franklin Templeton's focus on leveraging blockchain-based technologies to enhance traditional investment vehicles.
"The Western Asset Liquidity business has long focused on helping clients move forward without choosing between innovation and managing risk," said Matt Jones, Franklin Templeton's Head of Institutional Liquidity. "Being early only matters if you do it responsibly, and these updates prove how we can help institutions adopt tokenized infrastructure with products they already know."
The updates apply to two existing traditional Rule 2a-7 government money market funds and are intended for Western Asset Management to continue meeting the needs of its institutional clients and distribution partners as the market for delivery of digital products evolves. These changes will enable institutional investors to use both funds more effectively across two major applications: stable reserve management and blockchain-enabled intermediary distribution.
The Western Asset Institutional Treasury Obligations Fund ($LUIXX)
- The Western Asset Institutional Treasury Obligations Fund has been updated to align with the reserve requirements of the GENIUS Act, the federal stablecoin framework signed into law in July 2025, and now invests exclusively in U.S. Treasuries with maturities of 93 days or less. The change positions the fund to support stablecoin reserve management as institutional adoption accelerates. With the stablecoin market surpassing $310 billion in total supply and projecting to reach approximately 2 trillion by 2030, demand is growing for regulated, high-quality liquidity across digital payment, settlement, and collateral platforms.
The Western Asset Institutional Treasury Reserves Fund ($DIGXX)
- The Western Asset Institutional Treasury Reserves Fund introduced a new Digital Institutional Share Class ($DIGXX) designed for distribution through blockchain-enabled intermediary platforms. The update allows approved intermediaries to leverage blockchain technology for recording and transferring fund share ownership. This provides faster settlement, 24/7 transactions, and easier integration with digital collateral and cash management systems, while the fund itself remains a traditional, SEC-registered money market fund. As interest in tokenized funds grows, this approach reflects how asset managers are adapting fund distribution to meet institutional demand for regulated products that work within digital market infrastructure.
"Traditional funds are already beginning to move on-chain, so rather than question their ability, our focus is to make them more accessible and useful by many," said Roger Bayston, Head of Digital Assets at Franklin Templeton. "By prioritizing interoperability and flexibility, we're opening more ways for clients to access and deploy regulated funds across the platforms they rely on, giving investors greater choice in how they put their capital to work."
Franklin Templeton is a pioneer in digital asset investing and blockchain innovation, combining tokenomics research, data science, and technical expertise to deliver cutting-edge solutions since 2018. Learn more at Franklin Templeton Digital Assets.
About Franklin Templeton
Franklin Templeton is a trusted investment partner, delivering tailored solutions that align with clients' strategic goals. With deep portfolio management expertise across public and private markets, we combine investment excellence with cutting-edge technology. Since our founding in 1947, we have empowered clients through strategic partnerships, forward-looking insights, and continuous innovations – providing the tools and resources to navigate change and capture opportunity.
To learn more, visit franklintempleton.com and follow us on LinkedIn.
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