Franklin Templeton adapts cash funds for use on blockchain.

• Franklin Templeton integrates funds into the blockchain ecosystem.
• Money market funds eligible for stablecoins
• Traditional asset managers are adopting tokenized liquidity.

Franklin Templeton has made updates to two institutional money market funds to make them compatible with blockchain-based infrastructures. This initiative reflects the growing trend of large asset managers adapting traditional cash and liquidity products to tokenized environments without altering established regulatory frameworks.

The changes involve funds managed by Western Asset Management, an affiliate of Franklin Templeton. The proposal aims to allow institutional investors to use known financial instruments in on-chain settlement, registration, and reserve management systems, including structures linked to regulated stablecoins.

One of the updated products was the Western Asset Institutional Treasury Obligations Fund. The fund now meets the reserve criteria defined by the United States' GENIUS Act, enacted in July of last year. This legislation establishes which assets can be used as collateral for regulated stablecoins in the country.

With the update, the fund now exclusively holds US Treasury securities with maturities of 93 days or less. This characteristic makes the product eligible for integration into stablecoin reserve structures, while maintaining the conservative profile typical of money market funds aimed at institutions.

The second product involved is the Western Asset Institutional Treasury Reserves FundIn this case, the main innovation was the creation of a new class of digital institutional shares. This structure allows authorized intermediaries to register and transfer ownership of shares using blockchain infrastructure.

Despite the adoption of new technological mechanisms, the fund continues to operate as a traditional money market fund. The difference lies in the operational layer, which now offers faster settlement, integration with digital guarantee systems and cash management solutions, as well as the possibility of continuous transfers and settlements, 24 hours a day.

Franklin Templeton emphasized that the strategy does not involve launching native cryptocurrency funds. The priority is to facilitate the adoption of on-chain infrastructure by institutional investors through already familiar products, reducing operational and compliance barriers.

This move follows a broader trend in the financial sector. Global banks and asset managers are opting to bring traditional products to tokenized environments, rather than creating new vehicles exclusively focused on cryptocurrencies. Recently, other financial institutions have also moved in this direction by structuring money market funds with blockchain-based ledgers and settlements.

These initiatives indicate that the tokenization of cash and liquidity assets is being treated as a natural extension of the existing financial infrastructure, connecting traditional markets to digital systems in a gradual manner and in accordance with current regulatory requirements.