SEC Staff Clears Franklin Templeton Funds to Use Onchain BENJI System

Franklin Templeton launched the Franklin OnChain U.S. Government Money Fund, or FOBXX, in 2021 as the first U.S.-registered mutual fund to use a public blockchain as its official transaction and ownership record. Each share is represented by a BENJI token, while transfer agent Franklin Templeton Investor Services links Stellar blockchain data with private internal records. Extending that infrastructure to conventional registered funds matters because it brings regulated cash management onto blockchain rails without changing the underlying money-market fund structure.

SEC Division of Investment Management staff issued a no-action letter on Aug. 12, 2026, allowing Franklin Templeton’s affiliated open- and closed-end funds to have Franklin Templeton Investor Services custody their FOBXX holdings for cash balances and securities-lending collateral. The fund had $753.24 million in net assets as of June 30. The relief, tied to Rule 17f-2 and specific safeguards, requires separate wallets, annual board reviews and three accountant verifications each fiscal year, including two unannounced checks. It is a staff enforcement position, not formal Commission approval.