Franklin Templeton has repositioned two institutional money market funds managed by Western Asset Management to support stablecoin reserves and to function on blockchain-enabled distribution platforms. The firm says these updates apply to two existing Rule 2a-7 government money market funds and do not change their status as SEC-registered products. One fund was restructured to align with GENIUS Act reserve requirements, while the other added a blockchain-ready share class for digital distribution. Executives framed the changes as integrating blockchain utility into traditional liquidity products without converting the funds into crypto-native offerings.
Franklin Templeton’s Strategic Move in Tokenized Finance
The repositioning targets two use cases: reserve management for institutional stablecoin issuers and blockchain-based fund distribution. Franklin Templeton maintains that the updates expand usability within regulated digital finance while preserving the funds' conventional regulatory and investment frameworks. In other words, the firm altered how shares can be distributed and recorded, not the underlying investment strategies.
Western Asset Institutional Treasury Obligations Fund Updates
The Western Asset Institutional Treasury Obligations Fund was restructured to meet reserve requirements under the GENIUS Act and now invests exclusively in U.S. Treasuries with maturities of 93 days or less. That positioning is intended to align the fund with the needs of stablecoin issuers operating under the federal framework enacted in July 2025. The change keeps the product within the Rule 2a-7 government money market category while narrowing eligible instruments to short-term Treasuries.
Western Asset Institutional Treasury Reserves Fund Innovations
The Western Asset Institutional Treasury Reserves Fund introduced a Digital Institutional Share Class designed for distribution through blockchain-enabled intermediary platforms. Approved intermediaries can use blockchain technology to record and transfer fund share ownership, which affects share distribution and recordkeeping but not the fund's investment approach or regulatory status. This development sits alongside broader rulemaking and industry discussion about regulated stablecoin infrastructure, including related initiatives such as FDIC rules for stablecoins.
Industry Perspective and Future Outlook
Franklin Templeton described the updates as a measured effort to combine innovation with operational discipline. Matt Jones, the firm's head of institutional liquidity, emphasized balancing early adoption with risk management, while Roger Bayston, head of digital assets, said the move responds to institutional demand for regulated funds that work within digital market infrastructure. The announcement fits into the firm's broader approach of making existing products interoperable with blockchain systems rather than launching crypto-native alternatives; for additional context see the institutional investment forecast that discusses the firm's strategy.
Why this matters
For most miners with between one and a thousand devices in Russia, these changes are unlikely to alter day-to-day mining operations directly because the updates are aimed at institutional stablecoin issuers and intermediaries. At the same time, the move could expand the set of regulated liquidity products that work with blockchain rails, which matters if you interact with institutional stablecoins or custodial services. Importantly, the funds remain traditional SEC-registered money market vehicles; the blockchain element pertains to share distribution and recordkeeping rather than converting fund assets to onchain holdings.
What to do?
- Follow announcements from stablecoin issuers and custodians you use to see if they adopt funds repositioned under the GENIUS Act.
- Check whether any counterparties (exchanges, wallets, payment providers) start using digital institutional share classes for settlement, and ask how that affects deposit and withdrawal procedures.
- Keep basic documentation of transfers between crypto and fiat channels, since institutional plumbing changes can alter settlement timing or recordkeeping practices.
- Stay informed about U.S. regulatory developments that affect stablecoin reserves and regulated distribution, for example reporting and intermediary approvals under the new framework: see coverage of U.S. regulation in 2025.
FAQ
What did Franklin Templeton announce? The firm updated two Western Asset institutional money market funds to support stablecoin reserves and to enable blockchain-based distribution through a new share class.
Which law does the update align with? One fund was restructured to meet reserve requirements under the GENIUS Act, the federal stablecoin framework enacted in July 2025.
Are these funds fully onchain? No. Franklin Templeton says the funds remain traditional SEC-registered products; blockchain is used for share distribution and recordkeeping, not to change underlying investments.
Who is the target audience? The updates are aimed at institutional investors, stablecoin issuers, and intermediaries that need regulated liquidity products compatible with digital market infrastructure.
