Key Highlights
Regulatory approval granted for Franklin’s investment vehicles to hold tokenized BENJI shares.
ETFs and mutual funds managed by Franklin now permitted to maintain BENJI positions under SEC guidelines.
BENJI utilizes Stellar blockchain infrastructure while maintaining conventional transfer-agent oversight.
Regulatory relief eliminates traditional custody obstacles for Franklin’s investment offerings.
Franklin broadens BENJI’s utility within institutional and cash management sectors.
Franklin Templeton has obtained regulatory approval from SEC officials enabling its investment vehicles to hold shares in BENJI, its blockchain-enabled money market offering. This authorization eliminates significant custody obstacles that historically prevented direct ownership by ETFs and mutual funds. Consequently, Franklin can now embed tokenized government money market instruments more comprehensively throughout its conventional fund lineup.
Regulatory Authorization Enables Direct BENJI Holdings
The Investment Management Division at the SEC provided the no-action correspondence pursuant to Investment Company Act provisions. This regulatory relief addresses Section 17(f) and Rule 17f-2 stipulations that govern custodial protocols for registered investment entities. Franklin’s funds may now maintain FOBXX positions without adhering to multiple regulations originally crafted for tangible securities.
These legacy regulations emphasize physical certificates, secure vault protocols, and comparable tangible custody safeguards. FOBXX operates through digital recordkeeping and blockchain-based transactions instead of paper certificates for share administration. Regulators approved Franklin’s framework because conventional shareholder oversight mechanisms continue operating within the system.
Franklin Templeton Investor Services will establish Stellar-based digital wallets for investment funds acquiring FOBXX holdings. The organization will maintain custody of private keys associated with these wallets. Simultaneously, the affiliated transfer agent will preserve official ownership documentation and handle administrative responsibilities.
BENJI Merges Distributed Ledger Technology With Conventional Oversight
FOBXX employs blockchain infrastructure in conjunction with standard book-entry mechanisms rather than depending exclusively on decentralized ledgers. Transaction data gets recorded on Stellar, whereas the transfer agent preserves authoritative ownership documentation. This framework provides Franklin with multiple protective measures for rectifying transaction discrepancies or recovering shareholder data.
Regulators drew comparisons between this arrangement and prior book-entry custody frameworks that functioned without tangible securities. Additionally, officials referenced a 1992 no-action determination involving Franklin during evaluation of this recent submission. That historical precedent helped establish regulatory treatment for securities documented through electronic systems.
Franklin introduced FOBXX on Stellar during 2021 as a pioneering blockchain-powered registered fund. BENJI denotes shares of this money market vehicle through distributed ledger technology. The fund’s holdings predominantly consist of United States government obligations, liquid assets, and repurchase transactions.
Franklin Broadens Institutional Applications for Tokenized Vehicle
Franklin has deployed BENJI across multiple blockchain platforms following its initial Stellar introduction. The offering subsequently expanded to Ethereum, Polygon, Avalanche, Arbitrum, Base, Aptos, and Solana. These implementations broadened distributed ledger accessibility while preserving established fund oversight and ownership mechanisms.
The investment firm has additionally created institutional use cases for BENJI extending beyond straightforward investment positions. Recent collaborations incorporated stablecoin exchange capabilities, collateralization features, corporate treasury solutions, and over-the-counter settlement functionality. Franklin further authorized qualified participants to transmit BENJI shares peer-to-peer between whitelisted blockchain addresses.
Previous strategic alliances integrated BENJI with Binance, MoonPay, and Payward for enterprise financial workflows. Nevertheless, the regulatory determination addresses distinct implementation within Franklin’s proprietary registered fund offerings. This authorization now permits those vehicles to employ FOBXX directly for compliant liquidity management under prevailing custody standards.
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