GENIUS Act Alignment Pulls Western Asset Money Market Funds Into Regulated Stablecoin Infrastructure
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Franklin Templeton announced on Tuesday that two Western Asset government money market funds to support regulated digital finance while keeping them fully registered with the U.S. Securities and Exchange Commission have been adjusted.
The firm said the changes were designed to serve stablecoin reserve needs and enable blockchain-based fund distribution, without altering the conservative nature of the products. It explained that the updates were aimed at meeting rising institutional demand for compliant liquidity tools as stablecoins expand across payments, settlement, and collateral use.
Treasury Fund Repositioned for Stablecoin Reserves
Franklin Templeton said the Western Asset Institutional Treasury Obligations Fund had been restructured to meet reserve standards under the GENIUS Act. It was stated by the firm that the fund is now only interested in investing, especially in U.S. Treasury securities with less than of 93 days lifespan. It stated that this adjustment positioned the fund for use by stablecoin issuers operating within the federal framework introduced in July 2025.
Additionally, it was noted by the firm that institutional issuers were seeking products that functioned as financial infrastructure rather than speculative investments. Franklin Templeton explained that the fund’s revised structure was meant to meet these expectations while maintaining strict risk controls.
Blockchain-Based Distribution Without Product Change
The company also said the Western Asset Institutional Treasury Reserves Fund had launched a Digital Institutional Share Class. It was explained that approved intermediaries could use blockchain systems to record and transfer ownership of fund shares. This is aimed at allowing faster settlement and continuous transaction access.
As it stands, Franklin Templeton emphasized that the fund itself remained a traditional money market product. It clarified that blockchain technology affected only the method of share distribution and recordkeeping, not the investment strategy or regulatory oversight.
Matt Jones, head of institutional liquidity, was reported to have said the updates showed the firm’s focus on combining innovation with strong operational discipline. Roger Bayston, head of digital assets, was quoted as saying the move responded to institutional demand for regulated products that worked smoothly within digital market systems.
The firm added that this step aligned with its long-term strategy of integrating blockchain into existing financial products, reflecting a wider industry shift toward interoperability rather than replacement.
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