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United States securities and exchange commission logo





                              September 29, 2023

       David Mann
       Chief Executive Officer
       Franklin Templeton Digital Holdings Trust
       One Franklin Parkway
       San Mateo, CA 94403

                                                        Re: Franklin Templeton
Digital Holdings Trust
                                                            Registration
Statement on Form S-1
                                                            Filed September 12,
2023
                                                            File No. 333-274474

       Dear David Mann:

              We have reviewed your registration statement and have the
following comments. In
       some of our comments, we may ask you to provide us with information so
we may better
       understand your disclosure.

              Please respond to this letter by amending your registration
statement and providing the
       requested information. If you do not believe our comments apply to your
facts and
       circumstances or do not believe an amendment is appropriate, please tell
us why in your
       response.

              After reviewing any amendment to your registration statement and
the information you
       provide in response to these comments, we may have additional comments.

       Registration Statement on Form S-1

       General

   1.                                                   Based on our
preliminary review of your registration statement, we have the following
                                                        initial set of
comments. Once you have amended your registration statement and
                                                        responded to each of
these comments, we will provide you with more detailed comments
                                                        relating to your
registration statement, as appropriate.
   2.                                                   We note that your
registration statement includes a number of blanks or omitted
                                                        information, including,
for example, the Initial AP, Authorized Participants and disclosure
                                                        regarding the material
terms of the material agreements, as well as inclusion of the
                                                        material agreements as
exhibits to the registration statement. Please revise to include this
                                                        information in your
next amendment, or tell us when you intend to do so. Please also
                                                        confirm your
understanding that the staff will need sufficient time to review this
 David Mann
FirstName  LastNameDavid    Mann
Franklin Templeton  Digital Holdings Trust
Comapany 29,
September  NameFranklin
               2023       Templeton Digital Holdings Trust
September
Page 2     29, 2023 Page 2
FirstName LastName
         information, and we may have additional comments at that time.
3.       We refer you to our December 2022 Sample Letter to Companies Regarding
Recent
         Developments in Crypto Asset Markets, located on our website at the
following
         address:
https://www.sec.gov/corpfin/sample-letter-companies-regarding-crypto-asset-
         markets. Please consider the issues identified in the sample letter as
applicable to your
         facts and circumstances, and revise your disclosure accordingly.
Risk Factors, page 16

4.       Provide a materially complete description of the risks related to
bitcoin and the bitcoin
         network, including, for example, the risks presented by the use of
bitcoin in illicit
         transactions and rewards for mining bitcoin that are designed to
decline over time, which
         may lessen the incentive for miners to process and confirm
transactions on the bitcoin
         network.
5.       Please revise your disclosure to address the competition you will face
in launching and
         sustaining your product. Please also revise your risk factors to
address the risks associated
         with this competition, including the risk that your timing in reaching
the market and your
         fee structure relative to other bitcoin ETPs could have a detrimental
effect on the scale and
         sustainability of your product.
6.       Please discuss in your risk factors the extent to which material
aspects of the business and
         operations of bitcoin trading platforms are not regulated. Also
discuss the
         risk of manipulation, front-running, security failures or operational
problems at bitcoin
         trading platforms.
Business of the Fund
Net Asset Value, page 66

7.       Please include a materially complete description of the methodology to
be used to
         calculate NAV and disclose how you will value your bitcoin holdings
for GAAP
         purposes. Please also tell us how you intend to develop accounting and
valuation policies
         to address significant events related to crypto assets. For example,
explain to us how your
         valuation policies will address the potential for a blockchain for a
crypto asset to diverge
         into different paths (i.e., a    fork   ) and airdrops.
Business of the Fund
Valuation of Bitcoin; The CF Benchmark Index, page 66

8.       Please revise your disclosure to provide a materially complete
description of the
         index methodology. Please also address the following in your
disclosure regarding the
         index:
             Include a table with market share and volume information for each
constituent
             trading platform comprising the index used to calculate the CME CF
Bitcoin
             Reference Rate;
 David Mann
Franklin Templeton Digital Holdings Trust
September 29, 2023
Page 3
                Explain how the trading platforms are selected and describe how
the CME CF
              Bitcoin Reference Rate is calculated by providing an example of
the calculation;
                Disclose here the extent to which the Sponsor has discretion to
select a different
              index; and
                Disclose whether the Sponsor will notify investors of changes
to the constituent
              trading platforms used to calculate the index, and, if so, how
the Sponsor will notify
              the investor of such changes.
Description of the Shares and the Declaration of Trust
Deposit of Bitcoin; Issuance of Creation Unit, page 70

9.       Please include a materially complete discussion of the creation and
redemption process.
         As appropriate, please also address the following:
             Discuss the potential impact on the arbitrage mechanism of the
price volatility,
             trading volume, price differentials across bitcoin trading
platforms, and the closing of
             bitcoin trading platforms due to fraud, failures, security
breaches or otherwise;
             Clarify here whether the Sponsor may generally suspend creations,
and, if so, the
             circumstances under which it may do so; and
             Describe the mechanics of how the creation and redemption process
will work
             between the Trust, the Authorized Participants and the Custodians,
including a
             discussion of whether and to what extent creation and redemption
transactions will be
             settled on-chain or off-chain, and any risks associated with the
settlement process.
The Custodians
Bitcoin Custodian, page 80

10.      Please revise to provide a materially complete discussion of your
bitcoin custody
         arrangements. For example, please consider addressing the following:
             Describe the material terms of your agreement with the Bitcoin
Custodian;
             Describe how the Bitcoin Custodian will store the private keys,
including whether
             they will be commingled with assets of other customers and the
geographic location
             where they will be stored;
             Identify who will have access to the private key information and
disclose whether any
             entity will be responsible for verifying the existence of the
bitcoins; and
             Disclose whether and to what extent the Bitcoin Custodian carries
insurance for any
             losses of the bitcoin that it custodies for you.
Plan of Distribution, page 89
FirstName LastNameDavid Mann
11.    Please discuss whether and to what extent the size of your creation and
redemption
Comapany    NameFranklin
       baskets  could have Templeton  Digital
                           an impact on       Holdings
                                        the arbitrage  Trust
                                                      mechanism  in light of
the market for
       bitcoin.
September  29, 2023 Page 3
FirstName LastName
 David Mann
FirstName  LastNameDavid    Mann
Franklin Templeton  Digital Holdings Trust
Comapany 29,
September  NameFranklin
               2023       Templeton Digital Holdings Trust
September
Page 4     29, 2023 Page 4
FirstName LastName
Conflicts of Interest, page 90

12.      Please revise to disclose all existing and potential conflicts of
interest between your
         Sponsor and its affiliates and the Trust. Please also clarify whether
the Sponsor or any
         insiders have bitcoin or bitcoin-related exposure that could create
conflicts of interest and
         disclose whether you have a code of conduct or other requirements for
pre-clearance of
         bitcoin-related transactions that apply to your employees, the
Sponsor, or any of its
         affiliates.
Experts, page 91

13.      Please revise to include this information in your next amendment, or
tell us when you
         intend to do so.
Financial Statements, page 96

14.      We note your disclosure that your audited financial statements will be
provided by
         amendment. Please confirm you will file these audited financial
statements in a pre-
         effective amendment as soon as they are available in order to allow
the staff sufficient
         time to complete its review. Please also confirm your understanding
that the staff will
         need sufficient time to review the audited financial statements and
related information,
         and we may have additional comments at that time.
        We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.

       Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.

       You may contact Kate Tillan at 202-551-3604 or Michelle Miller at
202-551-3368 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Sonia Bednarowski at 202-551-3666 or Sandra Hunter Berkheimer at
202-551-3758 with
any other questions.



                                                                Sincerely,

                                                                Division of
Corporation Finance
                                                                Office of
Crypto Assets
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