Franklin Templeton Adapts Money Market Funds for US Stablecoin Framework
- Franklin Templeton has amended two Western Asset institutional money market funds (MMFs) to integrate with US stablecoin reserves.
- The Western Asset Institutional Treasury Obligations Fund (LUIXX) will now comply with GENIUS Act reserve requirements, focusing on short-term US government obligations.
- The Western Asset Institutional Treasury Reserves Fund (DIGXX) has introduced a blockchain-enabled “Digital Institutional” share class for onchain collateral management.
- Roger Bayston, head of digital assets, noted that the company anticipates managing stablecoin reserves in both tokenized and traditional forms.
- BlackRock is also modifying its Treasury MMF to serve as a reserve asset for US stablecoin issuers under the new federal framework.
These adjustments aim to provide regulated, government-backed collateral for payment stablecoins while maintaining SEC registration status. The amendments reflect a growing trend among asset managers to adapt existing funds for digital finance needs.
Franklin Templeton’s retrofitting of its MMFs positions them as compliant infrastructure within the emerging stablecoin landscape, aligning with GENIUS Act requirements. This strategic move highlights the increasing integration of traditional finance with digital assets and regulatory frameworks.(Source)
