Aviva Investors Launches Tokenized Sterling Fund on XRP Ledger

Aviva Investors Launches Tokenized Sterling Fund on XRP Ledger

by | Oct 26, 2026 | Blockchain Interoperability

Aviva Investors has introduced a digital share class for its £22 billion Sterling Liquidity Fund on the XRP Ledger, backing the new product with a £50 million investment. The Monday launch marks the second money market fund in the firm's collaboration with Ripple, bringing combined investments across its two tokenized share classes to more than £86 million.

The launch represents a significant expansion of Aviva's tokenization strategy, bringing one of Europe's largest money market funds onto blockchain infrastructure while preserving the conventional fund's investment objectives, risk profile, daily liquidity and regulatory safeguards.

Digital-Twin Structure

The new share class uses a digital-twin structure, allowing fund ownership to be represented on the XRP Ledger while the underlying portfolio and existing fund arrangements remain unchanged. The £22 billion in assets refers to the conventional Sterling Liquidity Fund's total holdings rather than the sum moved on-chain.

Aviva said the tokenized shares would offer an additional avenue for eligible investors to access the conventional fund. The setup keeps intact the same investment goals, risk characteristics, liquidity features and safeguards that conventional shareholders receive.

As Aviva Investors' biggest fund, the Sterling Liquidity Fund holds high-quality, short-duration debt denominated in British pounds. Established in 2002, the Ireland-domiciled UCITS money market fund targets low-risk returns and provides daily liquidity for investors managing cash holdings.

Qualified investors can reach the tokenized shares through digital wallets, even as the traditional fund keeps its regulated framework. The tokenization arrangement does not change the fund's underlying investment holdings into XRP. Investors retain interests in a regulated money market fund, while blockchain records support the digital share class.

Infrastructure and Custody

Four firms underpin the fund's blockchain and custody setup: Ripple, Komainu, Licuido and BNY Mellon. Komainu serves as an institutional digital asset custodian for the new share class, working alongside Licuido, whose platform handles the issuance and management of tokenized financial assets.

Custody of the fund's underlying portfolio remains with BNY Mellon. For Licuido, the sterling product extends work that began with Aviva's July dollar-fund launch.

According to Ripple, the XRP Ledger handles the issuance and administration of Aviva's tokenized fund shares at low transaction cost. The network has processed more than 4 billion transactions since 2012, supports nearly 8 million active wallets and is maintained by more than 130 independent validators, according to the announcement.

Previously, Ripple has invested in tokenization providers ZILO and Licuido, expanding the infrastructure available for digital fund distribution and asset management.

Second Tokenized Fund

The sterling product follows Aviva's first tokenized fund launch on July 29, when it introduced a digital share class for its U.S. Dollar Liquidity Fund. That earlier offering received approval from the Central Bank of Ireland, with access limited to eligible investors using digital wallets.

The latest announcement identifies a £50 million ($66 million) investment by Aviva in the sterling share class. Combined investments across the firm's sterling and dollar tokenized offerings now exceed £86 million, making Aviva one of Europe's largest tokenized money market fund providers, according to the companies.

The reported combined total remains separate from the £22 billion held by the conventional sterling fund. The companies did not disclose how many outside investors had subscribed to the sterling class or whether the new investment structure would introduce additional settlement services.

Executive Commentary

Mark Versey, CEO of Aviva Investors, said the launch demonstrated the company's commitment to expanding its tokenized investment products. "We believe tokenised funds can increase efficiency and ultimately lead to improved client outcomes," Versey said.

He credited Ripple's involvement in the two launches and indicated that the companies intend to continue exploring tokenization. Aviva plans to continue exploring tokenized funds with Ripple but has not announced another fund or launch date.

Nigel Khakoo, Ripple's senior vice president of trading and markets, said financial institutions are increasingly adopting infrastructure designed for continuous access and faster settlement. "Markets are moving to 24/7 access and settlement is moving to real-time, always-on rails," he said.

Industry Context

Aviva's latest offering joins a growing selection of institutional funds using blockchain infrastructure for digital ownership records and distribution. On October 22, JPMorgan Asset Management expanded two money market funds, MONY and JLTXX, onto Solana for qualified U.S. investors.

Its MONY fund targets U.S. Treasury securities and Treasury-backed repurchase agreements, while JLTXX requires approved wallet addresses for transactions involving tokenized shares. Franklin Templeton has expanded its Benji tokenized fund platform across several blockchains, including Stellar, Ethereum and Solana.

BlackRock's BUIDL fund has likewise introduced tokenized share classes on multiple networks. Aviva's sterling launch arrives immediately before Ripple's Swell conference in New York, scheduled for October 27-29, where tokenization and institutional blockchain adoption are expected to feature among the discussions.

Conclusion

Aviva Investors has launched a tokenized share class of its £22 billion Sterling Liquidity Fund on the XRP Ledger, investing £50 million in the new offering. Combined investments across the firm's sterling and dollar tokenized offerings now exceed £86 million. The companies intend to continue exploring tokenization, though no additional fund launches have been announced.

Frequently Asked Questions

What is the size of Aviva's Sterling Liquidity Fund?

The Sterling Liquidity Fund manages £22 billion in assets, making it Aviva Investors' largest fund. The fund invests in high-grade, short-term debt instruments denominated in British pounds.

How much has Aviva invested in tokenized funds?

Aviva has invested more than £86 million ($116 million) across its two tokenized share classes, including £50 million in the new sterling product and its earlier U.S. dollar liquidity fund launched in July.

What blockchain infrastructure supports the tokenized fund?

The fund uses the XRP Ledger for blockchain infrastructure, with support from Ripple, Komainu, Licuido and BNY Mellon. Komainu provides digital asset custody, Licuido offers tokenization infrastructure, and BNY Mellon custodies the underlying assets.

When did Aviva launch its first tokenized fund?

Aviva launched its first tokenized fund on July 29, introducing a digital share class for its U.S. Dollar Liquidity Fund. That offering received approval from the Central Bank of Ireland.

What is a digital-twin structure in tokenized funds?

A digital-twin structure allows fund ownership to be represented on the blockchain while the underlying portfolio and existing fund arrangements remain in place. The conventional fund's investment objectives, risk profile and regulatory protections are preserved.

Sources

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Pendle Launches AAA CLO Yield Trading With deJAAA Token

Pendle Launches AAA CLO Yield Trading With deJAAA Token

by | Oct 21, 2026 | DeFi

Pendle has brought AAA CLO yield trading to DeFi, opening a market built around deJAAA, a tokenized wrapper tied to Janus Henderson's AAA-rated collateralized loan obligation strategy. The market went live on October 21, 2026, according to Crypto Briefing.

The launch matters because it pushes a traditional structured-credit product deeper into on-chain markets. Rather than simply holding the fund, users can now separate their exposure into distinct principal and yield components and trade those pieces on-chain, according to Crypto Briefing.

How the deJAAA Market Works

At the center of the new listing is deJAAA, which wraps the Janus Henderson Anemoy AAA CLO Fund, a vehicle widely referred to by its ticker, JAAA. Trading in the market is expected to run until its maturity on November 26, 2026, according to Crypto Briefing.

deJAAA functions as a transferable tokenized version of JAAA shares, designed to let the position circulate through DeFi protocols without changing the economics of the underlying holding, according to Crypto Briefing. Pendle then divides that wrapped position into two parts: one tracking the principal value and another tracking the income stream the position produces over time.

The underlying instrument is a collateralized loan obligation, a pool of corporate loans that is divided into tranches repaid according to seniority. Holders of the top-rated AAA tranche stand first in the repayment queue, which is why that slice is considered the least risky part of the structure, according to Crypto Briefing.

That seniority is central to the product's appeal on-chain. By wrapping the safest layer of the loan pool into a token, the structure turns a corner of institutional credit into something that can be traded, split and posted as collateral across decentralized markets, according to Crypto Briefing.

The Fund Behind the AAA CLO Yield Trading Market

JAAA first appeared in mid-2025, structured as a tokenized professional fund with a British Virgin Islands domicile, according to Crypto Briefing. Tokenization is handled by Anemoy Capital SPC (BVI) through Centrifuge, and the vehicle entered the market with $1 billion in seed capital from the Sky ecosystem.

The fund's on-chain assets under management are currently estimated at between $580 million and $690 million, while the net asset value of each token is put at roughly $1.05, according to Crypto Briefing. Recent floating-rate returns have come in between 3% and 4.5% based on 7-day APY readings, and the vehicle carries a management fee of 0.50%.

The manager behind the strategy is a large presence in this corner of credit. Janus Henderson runs more than $30 billion across comparable AAA CLO strategies and manages around $500 billion in total assets, according to Crypto Briefing.

Those figures help explain why the fund has become a candidate for DeFi integration. A large, seeded vehicle with a tokenized share class offers the kind of scale that lending and yield protocols typically look for when adding real-world collateral, according to Crypto Briefing.

JAAA's Growing DeFi Footprint

Pendle is not the first decentralized venue to list the fund. JAAA has already seen use on Aave Horizon and Morpho, according to Crypto Briefing.

On those lending platforms, governance debate has revolved around how much users ought to be able to borrow against the token. Proposals dated October 15, 2026, floated lifting JAAA's loan-to-value parameters on Aave Horizon to 87% and 89%, according to Crypto Briefing.

The deJAAA wrapper changes how holders can use the position. Instead of depending solely on primary redemptions through the fund itself, investors can trade their exposure on secondary markets and post it as collateral, according to Crypto Briefing.

Taken together, the venues stack into layered strategies. A user could maintain JAAA exposure, borrow against it on a lending market, and at the same time hedge or speculate on the income stream through Pendle, according to Crypto Briefing.

Risks in the New Market

The top credit rating does not eliminate risk, according to Crypto Briefing. Because the fund pays a floating rate, any move in interest rates alters what buyers of the yield component actually collect.

The wrapper itself introduces additional smart contract and structural complexity layered over the underlying fund, according to Crypto Briefing.

The push for higher loan-to-value ratios on Aave Horizon also has two sides. Greater borrowing capacity makes the token more useful as collateral, but it simultaneously thins the buffer available if prices shift or redemption requests bunch up, according to Crypto Briefing.

What to Watch Next

In the weeks ahead, the main markers to follow are trading activity in the deJAAA market ahead of its November 26, 2026 maturity, the outcome of the Aave Horizon loan-to-value proposals, and whether the fund's on-chain assets grow past their current band of $580 million to $690 million, according to Crypto Briefing.

The governance votes dated October 15, 2026, which propose parameters of 87% and 89%, would determine how much borrowing power the token can support on the lending venue, according to Crypto Briefing.

Conclusion

Pendle's deJAAA market, live since October 21, 2026, gives DeFi users a way to separate and trade the principal and yield of Janus Henderson's AAA-rated CLO fund, extending the token's reach beyond its existing use on Aave Horizon and Morpho. The next concrete steps to watch are trading activity in the market before its November 26, 2026 maturity and the outcome of the Aave Horizon proposals to lift JAAA's loan-to-value parameters to 87% and 89%.

Frequently Asked Questions

What is deJAAA and what does it give Pendle users access to?

deJAAA is a transferable tokenized wrapper around shares of the Janus Henderson Anemoy AAA CLO Fund, known as JAAA, designed so the position can circulate through DeFi while preserving the same underlying economics. Pendle divides that wrapped position into separate principal and yield components that users can trade on-chain.

When did Pendle's deJAAA market launch and when does it mature?

The deJAAA market on Pendle went live on October 21, 2026. Trading in the market is expected to run until its maturity on November 26, 2026, giving participants a window of roughly five weeks to split and trade the tokenized AAA CLO exposure.

How large is Janus Henderson's presence in AAA CLO strategies?

Janus Henderson oversees more than $30 billion across comparable AAA CLO strategies and manages around $500 billion in total assets. The JAAA fund itself entered the market in mid-2025 with $1 billion in seed capital from the Sky ecosystem, and its on-chain assets are currently estimated at between $580 million and $690 million.

Where else in DeFi is JAAA already being used besides Pendle?

JAAA has already seen use on the Aave Horizon and Morpho lending platforms. Governance discussions there have focused on borrowing limits, with proposals dated October 15, 2026 suggesting the token's loan-to-value parameters on Aave Horizon be raised to 87% and 89%.

What risks come with trading AAA CLO yield on Pendle?

The top credit rating does not eliminate risk. Because the fund pays a floating rate, rate moves change what yield buyers receive, and the deJAAA wrapper adds smart contract and structural complexity over the underlying fund. Higher loan-to-value proposals on Aave Horizon would also thin the buffer if prices shift or redemptions bunch up.

Sources

JPMorgan to Bring JPM Coin Deposit Token to Ethereum for Institutional Clients

JPMorgan to Bring JPM Coin Deposit Token to Ethereum for Institutional Clients

by | Oct 19, 2026 | Ethereum

JPMorgan plans to open its JPM Coin token, which stands for dollar deposits held at the bank, to institutional clients on the Ethereum network, Bloomberg reported on Monday, October 19, 2026. The move extends the token beyond Base, the layer-2 blockchain built by Coinbase Global, where JPM Coin first launched in November 2025.

The expansion marks a step by the largest U.S. bank toward using public blockchain infrastructure for institutional payments and settlement, rather than relying solely on its private network. JPM Coin lets eligible clients transfer funds within seconds, around the clock. According to the bank, Ethereum's deep liquidity draws crypto companies that want to pay onchain as well as financial firms settling trades or backing tokenized assets.

Why JPMorgan chose Ethereum for JPM Coin

Emma Landriault, the head of Kinexys Labs at JPMorgan's blockchain division Kinexys, told Bloomberg in an interview that Ethereum won out because it carries deeper liquidity than competing networks and the bank's institutional clients already use it, according to CoinDesk. Landriault said JPMorgan picked the network for its liquidity and existing use among clients, Cointelegraph reported.

Opening the token up more broadly is meant to serve two groups, Landriault said: crypto firms looking to make payments onchain, and financial firms that require a digital token for settling trades or backing tokenized assets. Landriault did not say when JPM Coin would become available on Ethereum, CoinDesk reported.

Landriault framed the expansion as part of a broader trend. "We've clearly been in a year of further convergence between Wall Street and crypto," she said, according to CoinGape. "It's not just Wall Street going to public chains, but the institutional web3 players getting more embedded and partnering with traditional financial institutions," she added.

How the JPM Coin token works

JPM Coin represents U.S. dollar deposits held at JPMorgan and is built so institutional clients can move money and settle payments at any hour, with near real-time finality. The token is issued by Kinexys, JPMorgan's blockchain business unit, and the bank describes it as the first bank-issued USD-denominated deposit token, with the ticker JPMD.

Even though issuance happens on public networks, access to JPM Coin stays limited to vetted institutional participants, Cointelegraph reported. Crypto information platform Unfolded said the expansion points to banks making greater use of public blockchains, while noting that JPM Coin's status as a regulated bank deposit token means it is not broadly designed to integrate with decentralized finance, bloomingbit reported.

Deposit tokens like JPM Coin differ from stablecoins issued by non-bank companies: rather than a claim on reserves parked with a separate issuer, the token is a direct claim on deposits sitting at a regulated bank. The token got its start as an internal settlement mechanism, letting JPMorgan's institutional customers transact with one another over a permissioned network run by the bank, according to KuCoin.

From Base and Canton to Ethereum

The Ethereum plan comes after JPMorgan rolled out JPM Coin in November 2025 on Base, a layer-2 network tied to crypto exchange Coinbase. When it launched there, the bank signaled it intended to add more public blockchains over time, Cointelegraph reported.

The bank had already flagged a move outside Base in January, when Digital Asset and Kinexys by J.P. Morgan announced their intent to collaborate on the native issuance of JPM Coin on the Canton Network, a blockchain built with privacy features for coordinated financial markets. Under that collaboration, institutions using Canton would be able to issue, transfer, and redeem JPMD near-instantly, with an initial focus on establishing the technical and business frameworks to support issuance, transfer, and redemption directly on the network.

"This collaboration brings to life the vision of regulated digital cash that can move at the speed of markets," said Yuval Rooz, co-founder and CEO of Digital Asset, in the January announcement. Naveen Mallela, global co-head of Kinexys by J.P. Morgan, said at the time that the token pairs the safety of deposits issued and settled by a bank with round-the-clock, near real-time transactions on a blockchain.

JPMorgan's broader blockchain push

The expansion takes JPMorgan's blockchain work past its in-house Kinexys network, which handles upwards of $7 billion in daily transactions, a small piece of the bank's $12 trillion a day payments business, CoinDesk reported. JPMorgan has been among the most active banks in the sector, having processed significant transaction volume through Kinexys, formerly known as Onyx, according to KuCoin.

Banks have embraced tokenization, but mostly away from public networks. In the U.S., JPMorgan, Citi, Bank of America and Wells Fargo, along with more than a dozen other banks, have plans to start a shared network for tokenized deposits, CoinDesk reported. Outside the country, JPMorgan counts among the 30-plus banks working with Swift, the interbank messaging service, to shape the features and governance of Swift's planned blockchain-based ledger.

Almost $50 billion worth of crypto assets are locked in Ethereum-based applications, according to DeFiLlama data cited by CoinDesk. Putting JPM Coin on Ethereum could make institutional players more comfortable with public blockchain rails and possibly prompt rival banks to do the same, KuCoin reported.

What remains unknown about the rollout

Details on the specific scope of the Ethereum rollout, including which institutional clients will have access and what transaction types will be supported, were not fully specified in available reporting, according to KuCoin. Landriault gave no timeline for when the token would go live on the network.

JPMorgan had not responded to a CoinDesk request for details by publication time, and Cointelegraph said it contacted the bank for additional details but did not receive an immediate response. Available reporting indicates the expansion is aimed at institutional clients, not retail users, and does not indicate a shift toward retail cryptocurrency products at JPMorgan.

Conclusion

JPMorgan plans to make JPM Coin, its dollar-denominated deposit token for institutional clients, available on Ethereum, extending a rollout that began on Coinbase's Base network in November 2025 and was followed by a January plan to issue the token natively on the Canton Network. The bank has said Ethereum's liquidity and its existing use among institutional clients drove the choice, and the token will remain restricted to approved institutional participants.

The next concrete step is the Ethereum launch itself, for which Landriault gave no date. JPMorgan had not responded to requests for further detail from CoinDesk or Cointelegraph by publication time, leaving the timeline, eligible clients, and supported transaction types to be confirmed as the rollout progresses.

Frequently Asked Questions

When will JPM Coin be available on Ethereum?

No date has been given. Emma Landriault, head of Kinexys Labs at JPMorgan's blockchain division, did not say when JPM Coin would become available on Ethereum, CoinDesk reported. JPMorgan had not responded to requests for details from CoinDesk or Cointelegraph by publication time.

Why did JPMorgan choose Ethereum for JPM Coin?

Emma Landriault said JPMorgan chose Ethereum because the blockchain offers more liquidity than rival networks and is already used by institutional clients. The bank said Ethereum's liquidity makes it attractive for crypto companies seeking blockchain payments and financial firms settling trades or backing tokenized assets.

Who can use JPM Coin on Ethereum?

Only approved institutional clients. While the tokens are issued on public networks, JPM Coin will remain restricted to approved institutional participants, Cointelegraph reported. Available reporting indicates the expansion targets institutional payments and asset settlement rather than retail use.

How is JPM Coin different from a stablecoin?

JPM Coin is a deposit token representing a direct claim on dollar deposits held at JPMorgan, a regulated bank. Stablecoins are typically issued by non-bank companies backed by separate reserve assets. That distinction matters for institutional treasurers and compliance teams facing stricter rules on counterparty risk and custody.

What other blockchains support JPM Coin?

JPM Coin first launched in November 2025 on Base, the Ethereum layer-2 network built by Coinbase. In January, JPMorgan and Digital Asset announced plans to issue the token natively on the Canton Network, a privacy-enabled blockchain for institutional finance. Ethereum is the latest addition, with no launch date disclosed.

Sources

SEC Launches Five-Year Innovation Exemption for Tokenized Stocks

SEC Launches Five-Year Innovation Exemption for Tokenized Stocks

by | Oct 10, 2026 | Policy & Regulations

The Securities and Exchange Commission issued an order on September 17, 2026, creating a temporary innovation exemption to facilitate on-chain trading of tokenized National Market System (NMS) stocks. The relief runs for a five-year term through September 17, 2031, allowing qualifying venues to operate under conditional exemptions from exchange registration under the Securities Exchange Act of 1934.

The order allows registered broker-dealers and alternative trading systems to trade tokenized shares on public blockchains without registering as national securities exchanges, according to Forkast News. The move establishes a structured venue layer for tokenized equity transactions following a surge to $15.6 billion in monthly tokenized equity volume in September 2026.

The Mechanics of the Innovation Exemption

The SEC innovation exemption establishes a regulatory sandbox that permits an unaffiliated company to tokenize a public company's listed equity without corporate involvement. Tokenized securities venues (TSVs) may then offer those digital shares for trading, subject to conditions that include mandatory volume caps and platform limits.

Trading may take place only across three public blockchains: Ethereum, Solana, and BNB Chain, Forkast News reported. The SEC explicitly identified these networks for the controlled trial rather than establishing an open-ended channel for digital equities.

To participate, a TSV must post a public notice at least 30 calendar days before launching operations and email the SEC within one business day of that publication. Platforms can implement access controls by restricting liquidity pools to allow-listed wallet addresses or by programming the tokenized stock itself to transfer solely among verified wallets.

Notice Windows and Issuer Objections

Public companies face a strict 30-day timeline once an unaffiliated firm seeks to tokenize their shares under the innovation exemption framework. A TSV must deliver a formal written notice to the company, giving the corporate issuer 30 calendar days from receipt to submit an objection before tokenized trading can start.

If a corporation does not object within the 30-day period, the firm is considered to have accepted third-party tokenized trading of its shares, Latham & Watkins LLP reported. If an objection is lodged, the venue must update its public notice within five business days to disclose the objecting issuer and contact the SEC by email within one business day.

A corporate objection halts that specific TSV from using the exemption for that issuer's NMS stock, yet it does not prevent third parties from tokenizing shares or stop competing TSVs from filing separate requests. Issuers that tokenize directly or authorize their own tokenization are entirely exempt from the issuer notice mandate.

Market Structure and Infrastructure Concerns

The framework generates distinct market structure questions because TSV activity bypasses the consolidated tape and is not routed to a securities information processor. TSV trading does not register in standard volume channels, meaning consolidated feeds might understate true market liquidity, trading turnover, and daily volume metrics.

Latham & Watkins LLP noted that while volume ceilings apply to each individual TSV, aggregate on-chain turnover could surpass those thresholds across multiple independent venues. Issuers are advised to coordinate with listing exchanges and transfer agents regarding how on-chain activity is measured, while checking with legal staff as notices arrive.

The framework covers all exchange-listed domestic stocks as well as foreign private issuers, exposing American Depositary Receipt issuers to dual-halt coordination risks. A TSV must halt trading when the primary US exchange halts, but foreign shares remain vulnerable to overnight trading discrepancies if overseas listing bourses freeze while US trading desks are closed.

Industry Reaction to the Innovation Exemption

The new rules coincide with proposed SEC modernization of transfer agent rules permitting distributed ledger tracking, according to Forkast News. Early institutional activity under the sandbox is anticipated to center on highly liquid, widely held equities as market participants evaluate the innovation exemption.

Corporate stakeholders have begun submitting formal input regarding the regulatory perimeter. FinTech Magazine reported that Bitcoin Bancorp, Inc. submitted a formal public comment asking the SEC to clearly distinguish pure infrastructure vendors from registered securities dealers.

Bitcoin Bancorp Executive Vice President Eric Noveshen stated that "Tokenization of stocks and real-world assets is gaining momentum within capital market structures and Bitcoin Bancorp’s letter to the SEC supports the proposition that certain digital-asset access providers should receive securities-law relief." Noveshen added that "A company that verifies identity, has full AML/KYC compliance, and facilitating trading of tokenized stocks should receive an exemption from the definition of a “dealer" under federal securities statutes.

Under the regulatory order, eligible tokens must convey identical rights to the underlying stock. Venues are permitted to offer a tokenized NMS stock for trading only after verifying that holders receive full rights parity, specifically including proportional voting rights.

Holders of tokenized shares would generally be classified as beneficial owners of the stock rather than record owners on an issuer's master securityholder ledger, Latham & Watkins LLP reported. The tokenizing institution or an affiliated entity typically acts as the depository intermediary holding the underlying registered shares.

Companies pursuing direct tokenization gain greater oversight over their wrapper, trading venue, and disclosures. Meanwhile, issuers assessing third-party venue filings under the innovation exemption must review operations carefully, as unaddressed notices permanently open the door to on-chain trading.

Conclusion

The SEC innovation exemption establishes an active five-year test environment for trading tokenized NMS stocks on Ethereum, Solana, and BNB Chain. As the immediate exemption runs toward its September 17, 2031 expiration date, the SEC will collect trading and settlement data to decide whether to codify permanent rules or allow the relief to sunset.

Frequently Asked Questions

What is the duration of the SEC innovation exemption?

The SEC innovation exemption was issued on September 17, 2026, and provides a five-year temporary conditional relief period running until September 17, 2031, according to Latham & Watkins LLP and Forkast News.

Which blockchains qualify under the SEC order?

According to Forkast News, trading under the SEC exemption is restricted to three qualifying public distributed ledgers: Ethereum, Solana, and BNB Chain.

How long do public companies have to object to an Issuer Notice?

Corporate issuers have 30 calendar days from the date they receive an Issuer Notice to object; failing to act allows the tokenized securities venue to begin trading on day 31, according to Latham & Watkins LLP.

Do tokenized shares carry shareholder voting rights?

Yes. A tokenized securities venue may only list tokenized NMS stocks after confirming that token holders receive the same economic and voting rights as underlying shareholders, establishing them as beneficial owners under Rule 13d-3(a).

Sources

Franklin Templeton Seeks Regulatory Relief for Tokenized Fund Trading Pools

Franklin Templeton Seeks Regulatory Relief for Tokenized Fund Trading Pools

by | Oct 10, 2026 | Market

Global asset manager Franklin Templeton has engaged with the Securities and Exchange Commission to evaluate regulatory relief for tokenized fund trades across blockchain platforms, according to reports from Bitcoin.com News and KuCoin citing Huoxing Finance [F1]. The discussions, held with members of the SEC Crypto Task Force on Oct. 9, addressed fundamental legal constraints affecting trading pools, asset custody, fees, and share pricing [F2, F4, F43].

The outreach comes as investment managers attempt to integrate registered collective investment vehicles directly into on-chain decentralized market mechanisms [F4, F43]. Franklin Templeton, which managed $1.68 trillion in assets as of March 31, brought the inquiry forward to clarify how federal securities statutes apply to automated liquidity infrastructure [F4, F43, F56].

Regulatory Relief for Tokenized Fund Trades

The primary focus of the regulatory relief for tokenized fund trades involves operational conflicts under the Investment Company Act of 1940 [F1, F43, F44]. In the Oct. 9 session, the company raised questions regarding how statutory pricing frameworks apply when blockchain-based shares trade in pooled venues alongside other assets, KuCoin and Bitcoin.com News reported [F2, F44, F62].

Franklin Templeton examined the application of Section 22(d) and Rule 22c-1 to liquidity pools where shares of tokenized money market funds could be paired against tokenized National Market System equities [F7, F44, F46]. Section 22(d) mandates that redeemable fund shares be purchased at the current public offering price described in the prospectus, while Rule 22c-1 requires transactions to execute at the subsequent net asset value calculated after an order is received [F11, F12, F44, F46].

Automated liquidity pools price transactions dynamically using programmatic formulas, which can diverge from traditional fund pricing schedules [F47]. The firm questioned whether regulatory exemptions are required to accommodate these algorithmic pools and to permit liquidity providers supplying the capital to assess service fees [F8, F14, F45, F63].

ETF Trading Pairs and Liquidity Pool Status

The scope of the discussions extended beyond money market products to include tokenized exchange-traded funds [F4, F18, F48]. Franklin Templeton presented concepts for tokenized ETF trading pairs formed against tokenized stocks, permitted payment stablecoins, or tokenized money market fund shares [F18, F48, F65].

Because on-chain execution venues do not hold national securities exchange designations, the manager probed whether dedicated relief would be necessary to permit ETF shares to trade continuously on alternative networks, TokenPost reported [F20, F49].

The firm also sought regulatory perspective on the legal classification of the automated pools themselves [F21, F50, F65]. Franklin Templeton asked whether liquidity pools holding tokenized assets and distributing liquidity-provider positions could be defined as investment companies under the 1940 Act, or if those LP positions necessitate separate exemptions under the Securities Act of 1933 and the Securities Exchange Act of 1934 [F21, F22, F24, F25, F50].

Existing SEC Frameworks and Exemptions

A central backdrop to the dialogue is the SEC order from Oct. 17, which created a temporary five-year conditional structure for permissioned venues executing tokenized NMS stocks through automated market maker pools [F15, F51, F53]. That order exempts eligible entities from selected broker-dealer and national exchange mandates under defined operational terms [F15].

Those terms restrict access to approved market participants, set explicit volume thresholds, mandate public smart contracts, align trading halts with primary stock exchanges, and preserve shareholder rights [F16, F17]. While the Oct. 17 framework allows tokenized money market funds to function as pairing assets in pools, it stops short of providing exemptions under the Investment Company Act of 1940, leaving Section 22(d) and Rule 22c-1 issues unsettled [F51, F52].

Crypto News reported that Franklin Templeton CEO Jenny Johnson defended native on-chain accounting models during an appearance at the TOKEN2049 conference in Singapore [F73, F74]. Johnson criticized rival fund structures as digital twins whose official records remain in legacy transfer agencies while external tokens merely mirror balances [F73, F74, F79, F82]. She contrasted those setups with the firm's architecture, which embeds primary ownership records directly into blockchain platforms [F73, F81, F83].

BENJI Architecture and On-Chain Growth

Franklin Templeton first rolled out its digital asset recordkeeping infrastructure in 2021 by launching the Franklin Onchain U.S. Government Money Fund, registered under ticker FOBXX and relying on Rule 2a-7 [F30, F31, F54, F72]. Each BENJI token represents a single share in the open-end government fund, with share transfers managed directly by the proprietary Benji Technology Platform across public blockchains including Stellar, Ethereum, Polygon, Arbitrum, Avalanche, Aptos, Base, Solana, and BNB Smart Chain [F30, F32, F33, F54, F92].

According to an Aug. 12 SEC staff letter, Franklin Templeton Investor Services operates a dual ledger structure [F87]. The transfer agent tracks private investor data internally while recording anonymous transaction values on public blockchains, combining the inputs in real time to generate the official register [F87, F88, F91]. The letter noted that the transfer agent maintains authority to reverse unauthorized transfers, freeze accounts, migrate wallet registries, and re-establish primary records when required [F89, F90].

Data tracked by RWA.xyz showed Franklin Templeton Benji Investments holding approximately $2.60 billion in distributed asset value on Oct. 9, ranking it second across tokenized U.S. Treasury platforms [F104, F105]. The asset figure was led by iBENJI at roughly $1.71 billion and BENJI at approximately $760.6 million [F107]. Net assets reported for the conventional FOBXX fund stood at $686.64 million as of Aug. 31, while TokenPost reported the OnChain Fund reached $1.98 billion in assets under management as of April 29 [F55, F108, F109].

Franklin Templeton has continued expanding institutional applications for its tokens. The firm integrated its platform with MoonPay Trade on June 2 to let qualified institutions trade between tokenized fund shares and supported stablecoins [F35, F60, F114]. Additionally, SEC staff issued a no-action position on Aug. 12 regarding internal fund investments, allowing affiliated Franklin funds to hold BENJI shares under specific custody and board oversight procedures [F28, F57, F58, F116, F118].

Conclusion

Franklin Templeton's engagement with the SEC Crypto Task Force highlights unresolved legal hurdles facing tokenized fund trades in secondary decentralized markets. While existing regulatory orders offer conditional safe harbors for automated trading venues handling tokenized equities, they do not resolve 1940 Act requirements surrounding fund pricing and pool classifications [F43, F51, F52]. The firm is continuing to advocate for formal regulatory relief and exemptions that would legally permit open-end funds and ETFs to settle directly across automated blockchain liquidity pools [F1, F68].

Frequently Asked Questions

When did Franklin Templeton meet with the SEC Crypto Task Force?

Franklin Templeton met with staff from the SEC Crypto Task Force on Oct. 9 to discuss legal questions regarding pricing, service fees, and asset pools for tokenized funds [F2, F4, F43].

Which laws are central to the regulatory relief for tokenized fund trades?

The primary issues involve Section 22(d) and Rule 22c-1 of the Investment Company Act of 1940, which dictate prospectus pricing and forward net asset value execution for redeemable fund shares [F11, F12, F44]. Additional relief may involve the Securities Act of 1933 and the Securities Exchange Act of 1934 [F25].

What is Franklin Templeton's BENJI token?

BENJI is a blockchain token representing shares of the Franklin Onchain U.S. Government Money Fund (FOBXX), an open-end government money market fund launched in 2021 [F27, F30, F31, F54]. Transferring a BENJI token transfers the underlying fund share recorded via the Benji Technology Platform [F32, F33].

How much distributed asset value does the Benji platform hold?

Tracker RWA.xyz reported that Franklin Templeton Benji Investments held approximately $2.60 billion in distributed asset value on Oct. 9, ranking second among tokenized U.S. Treasury platforms [F104, F105]. Standalone BENJI assets stood at roughly $760.6 million, with iBENJI representing approximately $1.71 billion [F107].

Sources