Franklin Templeton Enhances Institutional Money Market Funds for Blockchain Settlement

Franklin Templeton has undertaken a significant restructuring of two cornerstone institutional money market funds, signaling the firm’s commitment to integrating traditional financial products with emerging blockchain-based settlement infrastructure. This dual product enhancement directly supports the expanding ecosystem of regulated stablecoins and digitized assets.

LUIXX Fund Restructured as Stablecoin-Compliant Reserve Vehicle

The Western Asset Institutional Treasury Obligations Fund (LUIXX) has undergone a comprehensive redesign to align with the GENIUS Act, comprehensive stablecoin legislation enacted in 2025 that establishes specific reserve requirements for regulated stablecoin issuers. By restructuring its portfolio to exclusively hold short-term U.S. Treasury securities with maturities not exceeding 93 days, LUIXX now functions as a purpose-built reserve mechanism for stablecoin operations. This reconfiguration reflects the growing demand for institutional-grade money market funds that can serve as transparent, auditable backing for digital currency systems. As stablecoins continue penetrating settlement and payment networks, reserve-backed money market funds like LUIXX provide essential infrastructure that bridges traditional finance with blockchain-native applications.

DIGXX Launches Onchain Share Class for 24/7 Market Access

The Western Asset Institutional Treasury Reserves Fund (DIGXX) has introduced a Digital Institutional Share Class, enabling authorized intermediaries to record and transfer fund ownership directly on blockchain networks. This innovation facilitates instantaneous settlement, continuous 24/7 trading capability, and seamless interoperability with digital asset ecosystems. Unlike LUIXX’s reserve-focused positioning, DIGXX’s digital-native money market funds architecture prioritizes operational efficiency and reduced friction in fund transactions. The fund maintains full SEC registration and compliance with conventional money market regulations while providing the technological advantages of onchain infrastructure.

Strategic Pivot Toward Tokenized Financial Infrastructure

Roger Bayston, head of digital assets at Franklin Templeton, emphasized the firm’s forward-thinking approach: “Traditional funds are already beginning to move on-chain, so rather than question their ability, our focus is to make them more accessible and useful by many.” This philosophy reflects a broader industry recognition that institutional money market funds represent a critical asset class for blockchain integration.

Franklin Templeton’s blockchain expansion extends beyond these fund modifications. The firm launched a tokenized money market fund offering in Hong Kong during November 2025, while simultaneously expanding its Benji Technology Platform to support the Canton Network ecosystem. These coordinated initiatives underscore Franklin Templeton’s position as an institutional investor embracing digital asset infrastructure rather than resisting it.

The dual enhancements to LUIXX and DIGXX demonstrate how traditional money market funds can evolve to meet dual mandates: serving as foundational reserve assets for regulated stablecoins while simultaneously providing institutional participants with efficient digital settlement channels. This multifaceted approach positions money market funds as essential connectors between legacy financial systems and emerging tokenized markets, potentially reshaping how institutions manage liquidity and settle transactions in hybrid finance environments.