Franklin Templeton has partnered with crypto exchange Bybit to give eligible institutional clients access to tokenized money market funds that can be used as off-exchange trading collateral.
Under the arrangement, Franklin Templeton will issue tokenized fund shares through its Benji Technology Platform, while clients can pledge those shares through Bybit’s institutional custody platform, ByCustody. Eligible investors can then receive USDT or USDC credit lines for trading without selling their underlying fund holdings.
The structure is designed to allow investors to keep earning income from their money market fund investments while using the shares as collateral. The underlying assets remain off the exchange and are recognised within Bybit’s trading system.
Franklin Templeton manages approximately $1.7 trillion in assets. The tokenized money market fund linked to the programme currently has around $686 million in net assets.
Building with @Bybit_Ins.
Bybit and Franklin Templeton Form Strategic Collaboration to Expand Access to Tokenized Investing
The wider collaboration launches with a new off-exchange collateral program that unlocks trading liquidity for institutional clients, alongside… pic.twitter.com/tjgglM0YwQ
— Franklin Templeton Digital Assets (@FTDA_US) September 28, 2026
The arrangement is part of the broader growth of tokenized real-world assets, where traditional financial products are represented digitally on blockchain networks. In this case, investors can use tokenized fund shares within a crypto trading environment without directly transferring the underlying assets onto the exchange.
The US Securities and Exchange Commission’s Division of Investment Management issued a no-action letter on August 12 concerning an arrangement involving Franklin OnChain US Government Money Fund. The SEC staff said it would not recommend enforcement action under the described structure, subject to certain conditions. However, the letter does not represent formal SEC approval.
Franklin Templeton already has similar off-exchange collateral arrangements with other major crypto exchanges, including Binance and OKX. The Bybit partnership expands that network further.
We are excited to announce Bybit’s strategic collaboration with @FTDA_US, expanding how institutions can deploy regulated, yield-bearing collateral while maintaining access to digital asset liquidity.
A step forward for capital efficiency, regulated custody, and tokenized… pic.twitter.com/8vbs4MXOeK
— Bybit Institutional (@Bybit_Ins) September 28, 2026
Bybit’s Global Head of RWA and TradFi, Yoyee Wang, said institutional investors are looking for more flexible ways to manage collateral. The company sees tokenized investment products as a way to connect traditional regulated assets with digital-asset trading.
The partnership also fits into Bybit’s wider expansion in regulated markets. Bybit Payments GmbH recently obtained an Electronic Money Institution licence from Austria’s Financial Market Authority.
For Franklin Templeton, the arrangement represents another step in expanding its Benji platform into digital markets. The companies are also expected to provide more information about the availability of the offering through Bybit and the Mantle network.
The deal brings together three areas that have increasingly overlapped in recent years: traditional money market investments, blockchain-based tokenization and crypto trading. For eligible institutional investors, the key attraction is the ability to use a traditional income-generating asset as collateral without having to sell it.
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