Franklin Templeton is adjusting existing institutional money market funds to fit into the evolving US stablecoin regulatory framework, signaling a shift toward integrating traditional finance products with blockchain-based payment infrastructure rather than launching entirely new crypto-native funds.
The firm has amended two long-established Western Asset institutional money market funds so they can support GENIUS-aligned stablecoin reserve structures while remaining SEC-registered 2a-7 funds. The changes allow these funds to function as regulated, government-backed collateral for payment stablecoins and tokenized cash applications without altering their core legal status.
The Western Asset Institutional Treasury Obligations Fund is invested exclusively in short-term US government securities, making it compatible with stablecoin reserve requirements that emphasize safety and liquidity. Meanwhile, the Western Asset Institutional Treasury Reserves Fund has introduced a blockchain-enabled digital share class, designed for 24/7 onchain cash management and collateral use by tokenization platforms and financial intermediaries.
Rather than creating new vehicles, Franklin Templeton opted for incremental changes, reflecting client demand for familiar, regulated fund structures that can connect to digital rails. This approach allows institutions to adopt onchain settlement and reserve management without moving into unregistered or experimental products.
Franklin Templeton’s strategy mirrors a broader industry move where traditional money market funds are being repositioned as backend infrastructure for tokenized dollars, highlighting how stablecoins are reshaping the role of regulated cash products in modern financial markets.
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