Franklin Templeton Explores Regulatory Exemptions for Tokenized Fund Trading, Managing $1.79 Trillion in Assets

Franklin Templeton is exploring regulatory exemptions to allow tokenized money market funds and ETFs to trade on blockchain trading venues. The company met with staff from the U.S. Securities and Exchange Commission (SEC) cryptocurrency working group on October 9 to discuss legal issues related to pricing, fees, and asset pools. The agenda included whether investors could exchange blockchain fund shares for tokenized national market system stocks through blockchain trading venues, and whether liquidity providers could charge service fees. These questions pertain to the pricing rules under the Investment Company Act and the necessity of exemptions. Regarding tokenized ETFs, Franklin Templeton also discussed the possibility of forming trading pairs with tokenized stocks, approved payment stablecoins, or tokenized money market funds, as well as whether liquidity pools would need to obtain regulatory exemptions for investment companies. The company disclosed a preliminary asset management scale of $1.79 trillion as of September 30. Franklin Templeton's blockchain fund record-keeping business began with the launch of the Franklin Onchain U.S. Government Money Fund in 2021, where the BENJI token represents shares of the fund, and transferring tokens will simultaneously transfer the corresponding shares, with related transactions recorded and tracked by the Benji Technology Platform.

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