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Franklin Templeton Embraces Long-Term Strategy with SEC Amid Changing Regulatory Landscape

Financial innovators are taking a long-term approach with the United States Securities and Exchange Commission (SEC), which Franklin Templeton’s head of digital assets, Roger Bayston, deems appropriate.

“The SEC, like a lot of regulatory bodies, likes to rely on legal precedents. […] Those precedents are being set in courts of law oftentimes, so this is just the process we’re engaged in,” Bayston told Cointelegraph’s Turner Wright at the Consensus event.

Despite skepticism about the SEC’s “open door” policy, Bayston viewed the agency’s actions as protecting the economy and manageable:

“We wouldn’t be in the business for 76 years — the business of trust — if we didn’t have some discipline and persistence and collaborative behavior with the global regulators we face.”

Bayston noted that things are evolving at the SEC, comparing this year to last. “We’ve been pleasantly engaged with the SEC […] and we’re excited as they shift and change their tone,” he said.

Franklin Templeton launched its Franklin OnChain U.S. Government Money Fund (the “Benji”) in 2023, but the journey took nearly five years, involving educating the SEC on blockchain technology’s role in mutual funds.

Bayston likened tokenized money funds to stablecoins.

The saver provides money to the operator, who invests it and returns the principal while keeping the profit from the investments.

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“Banks and money funds have existed side-by-side for multiple decades.

“I think this is the same construct that is likely to move forward,” Bayston said.

Franklin Templeton is optimistic about cryptocurrency, according to Bayston:

“We believe in the technologies and therefore we believe that the [crypto] tokens, properly structured, represent value for these technologies.”

He compared crypto’s significance to investment portfolios to that of technology stocks 30 years ago.

Franklin Templeton filed its application with the SEC for a spot Ether exchange-traded fund later than others.

Initially, the SEC delayed a decision on the application until June 11 but approved it along with others on May 23.

Bayston was not surprised by the timing. They were “not trying to give anybody an advantage in this nascent marketplace,” he said.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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