January 16, 2026
By Our Correspondent
Traditional money-market funds edge closer to the plumbing of digital finance
Franklin Templeton, one of the world’s largest asset managers, is quietly preparing for a future in which tokenised assets and regulated stablecoins become part of mainstream finance. The firm has updated two of its institutional money-market products to make them compatible with blockchain-based systems, blurring the line between conventional fund management and decentralised finance.
The changes apply to the Western Asset Institutional Treasury Reserves Fund (DIGXX) and the Western Asset Institutional Treasury Obligations Fund (LUIXX), both managed by Western Asset Management, a Franklin Templeton affiliate. While neither fund is new, their intended uses increasingly are.
LUIXX has been structured to comply with the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, a 2025 law that sets reserve requirements for regulated stablecoins. Because the fund holds only short-term U.S. Treasuries with maturities of less than 93 days, Franklin Templeton says it can now serve as a compliant reserve vehicle for stablecoin issuers.
Such products may become an important part of the financial back-end as stablecoins gain traction in payments and settlement. Rather than relying on opaque or lightly regulated reserves, issuers could park backing assets in familiar, tightly supervised vehicles.
DIGXX, meanwhile, is being nudged closer to the blockchain world through the launch of a Digital Institutional Share Class. Designed for distribution via blockchain-based platforms, the new structure allows authorised intermediaries to register and transfer ownership of fund shares on-chain. The promise is faster settlement, round-the-clock transactions and easier integration with digital-asset infrastructure.
For now, the fund remains firmly within the regulatory perimeter: it is registered with the Securities and Exchange Commission and continues to operate under standard money-market rules. The novelty lies not in the assets themselves, but in the rails on which they move.
“Traditional funds are already starting to move on-chain,” said Roger Bayston, Franklin Templeton’s head of digital assets, arguing that the challenge is no longer feasibility but usefulness and access.
The firm has been steadily expanding its blockchain ambitions. In November it extended its Benji Technology Platform to the Canton Network and launched a tokenised money-market fund in Hong Kong. None of this is revolutionary on its own. Taken together, however, it suggests that some of finance’s most conservative products may end up providing the foundations for its most experimental ones.
