Key Takeaways
- • SEC Issues No-Action Letter: The U.S. Securities and Exchange Commission granted Franklin Templeton no-action relief enabling registered investment funds to invest in and use the firm's on-chain government money market fund (FOBXX/BENJI) for cash management and securities-lending operations.
- • On-Chain Money Market Fund Structure: Franklin OnChain U.S. Government Money Fund (FOBXX) invests at least 99.5% of assets in U.S. government securities, cash, and repurchase agreements fully collateralized by U.S. government securities, maintaining traditional money market fund characteristics while recording shares on the blockchain.
- • Fund Scale and Performance: As of June 30, 2026, FOBXX held $753.24 million in total net assets with a net expense ratio of 0.20%, carrying AAA ratings from both Fitch and S&P, and delivering 3.79% one-year returns and 4.52% three-year annualized returns.
- • Regulatory Pathway Established: The no-action letter removes barriers for Franklin Templeton's traditional registered funds to treat FOBXX as an eligible cash management vehicle, establishing a regulatory framework for blockchain-based money market fund integration within institutional portfolios.
- • Fund Inception and Market Position: FOBXX launched on April 6, 2021, and has operated under Rule 2a-7 as a government money market fund, with the SEC relief now explicitly authorizing cross-fund usage among Franklin Templeton's registered investment company complex.
Summary
Franklin Templeton has secured regulatory approval from the SEC through a no-action letter that permits its registered investment funds to invest in and utilize the firm's on-chain government money market fund for cash management purposes. The relief specifically allows Franklin Templeton's traditional registered funds to employ FOBXX (fund number BENJI) as an eligible cash management vehicle, alongside authorization for securities-lending operations. This represents a significant regulatory milestone in the institutional adoption of blockchain-based money market infrastructure.
The Franklin OnChain U.S. Government Money Fund maintains the structural characteristics of a conventional government money market fund while incorporating blockchain-based share recording. The fund invests a minimum of 99.5% of total assets in U.S. government securities, including fixed, floating, and variable-rate instruments, along with repurchase agreements fully collateralized by U.S. government securities or cash. The fund operates under Rule 2a-7, the primary regulatory framework governing money market funds, ensuring compatibility with existing institutional investment guidelines and risk management protocols. The SEC's no-action letter confirms that blockchain recording of Fund shares does not affect the Fund's underlying investment structure or regulatory classification.
As of June 30, 2026, FOBXX maintained $753.24 million in total net assets with net expenses of 0.20% annually. The fund carries AAA ratings from both Fitch and S&P, reflecting the quality of its underlying government securities holdings. Performance metrics demonstrate competitive positioning within the money market fund universe: one-year returns of 3.79%, three-year annualized returns of 4.52%, and five-year annualized returns of 3.50%. Since its inception on April 6, 2021, the fund has delivered 3.34% annualized returns. Daily dividend distributions and a maximum initial charge structure align with standard money market fund operational parameters, facilitating integration with institutional cash management systems and alternative investment fund operations.
The no-action relief establishes a regulatory precedent for inter-fund blockchain-based money market fund transactions within traditional investment company complexes, potentially streamlining settlement, reducing operational friction, and enabling sophisticated liquidity management across Franklin Templeton's registered fund offerings. This approval positions FOBXX as an operational tool for fund complexes seeking blockchain efficiency while maintaining full compliance with U.S. securities law and money market fund regulations.
The Franklin OnChain U.S. Government Money Fund maintains the structural characteristics of a conventional government money market fund while incorporating blockchain-based share recording. The fund invests a minimum of 99.5% of total assets in U.S. government securities, including fixed, floating, and variable-rate instruments, along with repurchase agreements fully collateralized by U.S. government securities or cash. The fund operates under Rule 2a-7, the primary regulatory framework governing money market funds, ensuring compatibility with existing institutional investment guidelines and risk management protocols. The SEC's no-action letter confirms that blockchain recording of Fund shares does not affect the Fund's underlying investment structure or regulatory classification.
As of June 30, 2026, FOBXX maintained $753.24 million in total net assets with net expenses of 0.20% annually. The fund carries AAA ratings from both Fitch and S&P, reflecting the quality of its underlying government securities holdings. Performance metrics demonstrate competitive positioning within the money market fund universe: one-year returns of 3.79%, three-year annualized returns of 4.52%, and five-year annualized returns of 3.50%. Since its inception on April 6, 2021, the fund has delivered 3.34% annualized returns. Daily dividend distributions and a maximum initial charge structure align with standard money market fund operational parameters, facilitating integration with institutional cash management systems and alternative investment fund operations.
The no-action relief establishes a regulatory precedent for inter-fund blockchain-based money market fund transactions within traditional investment company complexes, potentially streamlining settlement, reducing operational friction, and enabling sophisticated liquidity management across Franklin Templeton's registered fund offerings. This approval positions FOBXX as an operational tool for fund complexes seeking blockchain efficiency while maintaining full compliance with U.S. securities law and money market fund regulations.
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