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Cryptopolitan 2026-01-13 21:55:05

Franklin Templeton updated LUIXX and DIGXX to support stablecoin reserves and on-chain fund settlement

Franklin Templeton has restructured two of its institutional money market funds, marking a new step toward integrating traditional finance with blockchain-based infrastructure. The company modified the Western Asset Institutional Treasury Obligations Fund (LUIXX) and the Western Asset Institutional Treasury Reserves Fund (DIGXX), both of which are managed by its affiliate, Western Asset Management. LUIXX to serve as stablecoin reserve vehicle The LUIXX fund has been amended to comply with the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, passed in 2025. The law sets the requirements for assets held as reserves for regulated stablecoins. According to Franklin Templeton, the fund now holds short-term U.S. Treasuries with maturities of less than 93 days, which means it is both liquid and complies with the new regulation’s requirements regarding the quality of its reserves. A spokesman confirmed that stablecoin issuers could utilize the Treasury Obligations fund for the specific purpose of reserve management, while still complying with the existing oversight of the US Securities and Exchange Commission. In addition, the change makes LUIXX one of the first money market products to be designed specifically to comply with stablecoin reserve requirements under the guidance of the Federal Government. DIGXX adds digital on-chain share class The second fund, DIGXX, has put in place what Franklin Templeton calls a Digital Institutional Share Class. This class allows recording and transferring shares in funds through blockchain-based networks, which offer close to instant settlement and continuous transaction availability. By operating on-chain, DIGXX can settle transactions 24 hours a day, thus reducing settlement delays that are typical with legacy fund transfers. According to the report, the on-chain functionality doesn’t affect the underlying portfolio composition, which still follows the rules governing US money market funds. Franklin Templeton’s integration with tokenized finance infrastructure Roger Bayston, Head of Digital Assets at Franklin Templeton , stated that the regulatory environment established by the GENIUS Act enabled the bridging of these funds with blockchain-based applications. He acknowledged that the intention was to enable institutions to function in controlled markets with the same standards that applied to traditional funds. The update to LUIXX and DIGXX follows previous steps taken by Franklin Templeton to integrate its products with blockchain systems. In November 2025, the firm launched a tokenized money market fund in Hong Kong and added its Benji Technology Platform to the Canton Network. The company is also responsible for the US state of Wyoming’s FRNT stablecoin, the first state-issued dollar-backed token. Want your project in front of crypto’s top minds? Feature it in our next industry report, where data meets impact.

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