Franklin Templeton receives SEC no-action letter for blockchain fund

The U.S. Securities and Exchange Commission handed Franklin Templeton a regulatory green light that the asset management industry has been watching for. The SEC’s Division of Investment Management issued a no-action letter on August 12, 2026, permitting Franklin’s own funds to invest in the Franklin OnChain U.S. Government Money Fund, known by its ticker FOBXX.

What the no-action letter actually does

In this case, the letter removes investment restrictions that previously prevented other Franklin-managed funds from putting money into FOBXX. The practical effect is that Franklin can now route capital from its broader fund lineup into FOBXX, deepening the pool of assets flowing into a blockchain-native investment vehicle. For a fund that already held over $360 million in assets under management as of March 31, 2024, that is a meaningful expansion of potential capital access.

FOBXX operates as a government money market fund under Rule 2a-7, targeting a stable $1.00 per share value. Its underlying holdings are about as traditional as it gets: U.S. government securities, cash, and fully collateralized repurchase agreements.

The fund that started it all

Franklin launched FOBXX in April 2021, making it the first U.S.-registered mutual fund to use a public blockchain for transaction processing and ownership recordkeeping. FOBXX represents each share as a BENJI token, processed on-chain using Franklin’s proprietary systems. The fund started on the Stellar blockchain and has since expanded to Arbitrum, Solana, Base, Polygon, Avalanche, and Ethereum.

Those minimums vary dramatically by network. Entry on Stellar starts at $20. Access via Ethereum requires $5 million, reflecting the higher transaction costs and institutional orientation of that network.

In April 2024, Franklin added peer-to-peer transfer functionality, letting holders move BENJI tokens directly between wallets without going through a traditional intermediary.

Why this regulatory moment matters

The ability for regulated funds to allocate into FOBXX means that exposure to blockchain-native money market infrastructure no longer requires a separate, standalone investment decision. It can be embedded within a larger portfolio allocation through familiar fund structures, which lowers the friction considerably for institutions that are blockchain-curious but compliance-constrained.

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