Franklin Templeton has restructured two of its institutional money market funds to align with blockchain based finance and the growing demand for regulated stablecoin infrastructure. The asset manager confirmed that its Western Asset Institutional Treasury Obligations Fund, known as LUIXX, has been modified to meet reserve standards for regulated stablecoins by holding only short term U.S. Treasuries with maturities under 93 days. This adjustment allows the fund to function as a potential reserve vehicle backing stablecoin issuance under current U.S. regulatory frameworks. The move reflects increasing interest from traditional financial institutions in supporting stablecoin ecosystems with compliant, low risk reserve assets as stablecoins gain traction in payments, settlement, and treasury operations.
Alongside the LUIXX update, Franklin Templeton also introduced an onchain share class for its Western Asset Institutional Treasury Reserves Fund, DIGXX. The new digital share class enables approved intermediaries to issue, record, and transfer fund shares directly on blockchain networks while maintaining the fund’s existing registration and regulatory structure. By allowing ownership records and transfers to occur onchain, the firm aims to support faster settlement cycles, continuous transaction availability, and easier integration with digital asset platforms. The underlying fund structure remains unchanged, but the onchain distribution layer positions DIGXX as a bridge between traditional money market products and tokenized financial systems increasingly used by institutional participants.
The changes highlight a broader shift among large asset managers toward embedding tokenization and stablecoin compatibility into established products rather than launching entirely new vehicles. As regulatory clarity around stablecoins improves, demand is rising for transparent and compliant reserve instruments capable of supporting large scale issuance. Franklin Templeton has already expanded its digital asset footprint through tokenized fund launches and blockchain based distribution platforms in multiple jurisdictions. By adapting existing money market funds for stablecoin and onchain use, the firm is signaling that traditional finance products can serve as foundational infrastructure for digital dollar systems, reinforcing the convergence between asset management and blockchain based financial rails.
