Franklin Templeton Prepares Two Money Market Funds for Tokenized Finance Under U.S. GENIUS Act
Franklin Templeton has amended prospectuses for two money market funds — the Franklin Treasury Only Cash Fund and the Franklin Federal Money Fund — to enable future investments in tokenized money market funds and digital asset custody, aligning with provisions of the proposed U.S. GENIUS Act. The filings indicate the funds may utilize blockchain-based tokenization and appoint digital asset custodians, but no token investments have been made yet. Franklin Templeton’s move positions its cash management products to adopt tokenized finance if the GENIUS Act or similar regulatory changes permit broader institutional use of tokenized money market funds. The change is procedural: it adds language for potential tokenized instruments and digital custody while keeping traditional money market operations intact. This update could shorten on-ramps for institutional participation in tokenized short-term instruments if regulatory clarity arrives, potentially affecting liquidity and demand dynamics in dollar-denominated cash equivalents.
Neutral
This is a procedural regulatory-foresight filing rather than an active move into crypto assets. Franklin Templeton updated prospectuses to permit future investment in tokenized money market funds and use of digital custodians, but has not deployed capital into tokens. As such, immediate market impact on major cryptocurrencies is limited. However, the filing signals growing institutional preparedness: if the GENIUS Act or similar rules pass, tokenized money market funds could attract institutional cash, improving on-ramps between traditional finance and tokenized instruments. Short-term: likely neutral to mild positive for tokenization narratives and for stablecoin/short-term token liquidity expectations; traders should not expect abrupt price moves in BTC/ETH from this alone. Long-term: potential bullish structural effect for tokenized dollar instruments and crypto markets by expanding institutional participation and liquidity in tokenized short-term instruments, similar to how regulatory clarity historically supported ETF adoption. Monitor regulatory progress, custody approvals, and any actual fund allocations to tokenized instruments for signs of market-moving flows.