Franklin Templeton Expands Tokenized Collateral to Bybit After Binance Launch
Franklin Templeton's Benji tokenized money market fund shares can now serve as collateral on Bybit for institutional clients, with assets remaining in regulated custody off-exchange. The integration mirrors a February launch on Binance and expands the yield-bearing tokens' utility across major trading venues.
Written by CoinArticle’s AI Newsroom · from 3 cited sources. How we work
Story Updates
- Updated Sep 29, 2026, 11:04 PM: Clarified that collateral remains in regulated off-exchange custody, a material difference from typical exchange collateral arrangements.
Off-Exchange Collateral Structure
Bybit and Franklin Templeton have launched a collateral program allowing eligible institutional clients to pledge Benji tokenized fund shares while trading on Bybit. Critically, the collateral remains in regulated custody rather than moving directly onto the exchange, reducing counterparty risk exposure for institutions. Clients can borrow USDT or USDC trading credit lines against the pledged shares without liquidating their positions.
Yield Retained During Borrowing
The tokenized shares continue earning yield on underlying money market assets throughout the loan period, allowing institutions to access leverage without forfeiting income. This structure mirrors the identical integration Franklin Templeton deployed on Binance in February, signaling a repeatable model across major exchanges. By making Benji shares usable as collateral across multiple venues, Franklin Templeton is expanding institutional distribution channels for its on-chain yield products and reducing friction for clients managing collateral across platforms.
Institutional Adoption Pattern
The multi-exchange approach demonstrates institutional demand for composable tokenized assets that function simultaneously as yield-bearing holdings and financial primitives in trading workflows. Keeping collateral in regulated custody—rather than moving it into exchange wallet systems—addresses a key institutional concern around asset segregation and regulatory clarity.
Why It Matters
For Traders
Access to leveraged credit lines across Binance and Bybit without moving collateral reduces execution friction, though custody terms vary by venue.
For Investors
Multi-exchange collateral support strengthens institutional adoption case for tokenized money market funds and validates yield-on-collateral as a durable product model.
For Builders
Off-exchange custody models for collateral open a new design space; protocols can explore similar yield-preserving structures that keep assets in regulated vaults.
This article is for information only and is not financial advice. Read the full disclaimer.
