Franklin Templeton restructures money market funds… “Expanding stablecoin and blockchain linkage”

Global asset manager Franklin Templeton has restructured two institutional money market funds (MMFs), moving to position itself for broader use of stablecoins and blockchain-based finance.

According to The Defiant, a media outlet specializing in virtual assets (cryptocurrencies), Franklin Templeton affiliate Western Asset has overhauled certain money market funds’ operating requirements and distribution methods so they can be used in digital-asset environments. While the funds themselves will maintain the same conservative approach centered on U.S. Treasuries, the focus is on expanding eligible use cases and access channels.

Among them, the “Western Asset Institutional U.S. Treasury Obligations Fund” was restructured so stablecoin issuers can include it as reserve assets. The fund is designed to meet the liquidity and stability standards required for stablecoin reserves by investing only in short-maturity U.S. Treasuries and Treasury-collateralized assets.

Another product, the “Western Asset Institutional U.S. Treasury Reserves Fund,” has not changed its asset composition, but introduced a new share class that enables distribution via blockchain-based platforms. This will allow institutional investors and financial distributors to offer and administer existing money market funds on blockchain infrastructure.

Franklin Templeton said the move “focused on increasing connectivity with digital financial infrastructure while maintaining existing regulated products.” The company expects stablecoin issuers to use the Treasury Obligations Fund as a tool for reserve management, and institutional distributors to apply the Treasury Reserves Fund to blockchain-based distribution channels.