Franklin Templeton converts money market fund into stablecoin reserve vehicle
Franklin Templeton announced an overhaul of two funds to better serve crypto-native liquidity needs. The LUIXX money market fund has been reconfigured to hold short‑term U.S. Treasuries and to comply with stablecoin reserve requirements, while DIGXX introduced an on‑chain share class that tokenizes ownership and enables clearer on‑chain accounting. The changes are designed to provide regulated, liquid reserve options for issuers and counterparties in the stablecoin ecosystem. These updates matter because regulated, treasury-backed reserve vehicles can increase transparency and operational interoperability between traditional asset managers and blockchain projects. By pairing a treasury-backed money market fund with tokenized share classes, Franklin Templeton may reduce friction for institutional stablecoin adoption and on‑chain settlements — though the approach will remain subject to regulatory scrutiny and operational auditing as the market evolves.