Franklin Templeton receives SEC approval to use on-chain money market fund as collateral.
DeFi & Yields ·
The U.S. Securities and Exchange Commission's Division of Investment Management issued a no-action letter to Franklin Templeton, permitting the asset manager's registered funds to use its on-chain money market fund (ticker: $FOBXX) as collateral for securities lending and to manage cash holdings. The relief removes certain compliance obligations tied to legacy rules governing physical securities, instead allowing Franklin Templeton to custody and record ownership of fund shares through its blockchain-integrated system. The structure is designed to enable intraday trading, hourly net asset value calculations, and faster transaction processing compared to traditional settlement methods. The specific mechanics of how the fund will operate at scale in this capacity, and whether other asset managers will seek similar regulatory clearance, remain to be seen.