Bybit Accepts Franklin Templeton Tokenized Funds as Trading Collateral
Franklin Templeton has partnered with crypto exchange Bybit to enable institutional investors to use tokenized shares of its money market funds as trading collateral. Via the Benji platform, clients can pledge these tokenized funds held in off-exchange custody to access credit lines paid in USDT and USDC stablecoins, allowing them to maintain yield on their holdings while actively trading cryptocurrencies.
Mechanics of the Franklin Templeton and Bybit Partnership
Franklin Templeton and Bybit have launched a program allowing institutional investors to use tokenized shares of money market funds issued via Franklin Templeton’s Benji platform as collateral for trading on Bybit. A key feature is that these assets remain held in off-exchange custody, avoiding the need to transfer assets directly onto the exchange.
Clients can access credit lines denominated in USDT or USDC stablecoins, usable for trading on Bybit. This structure enables investors to maintain ownership of the tokenized funds without selling them, while unlocking liquidity to engage in cryptocurrency trading.
Benefits for Institutional Investors
This arrangement lets investors continue earning yield from their money market fund holdings even while using these assets as collateral for crypto trading, enhancing capital efficiency.
It removes the necessity of liquidating fund positions to fund trading strategies, providing an advantage especially in volatile market conditions.
Future Developments and Plans
Franklin Templeton and Bybit are collaborating on a forthcoming tokenized investment product designed for wallet users on Bybit and the Mantle network, though specifics have not yet been announced.
Interest in tokenized money market funds is growing substantially, with the Bank for International Settlements estimating the market value to exceed $9 billion by September 2025.
Current Market Status and Competitors
As of recent data, Benji’s platform assets under management stand at approximately $669 million, down from $1.98 billion in April.
The largest tokenized money market fund to date is BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), which holds about $2.2 billion. BUIDL is accepted as collateral on Crypto.com and Deribit, and Binance allows institutional clients to use it as off-exchange collateral.
Why it matters
This partnership exemplifies the growing trend of integrating traditional investment products with cryptocurrency platforms, enabling institutional investors to manage capital more efficiently. Using tokenized funds as collateral enhances liquidity and trading flexibility while promoting broader adoption of traditional financial instruments within the crypto ecosystem. This move supports the development of asset tokenization markets, expanding the utility of digital funds beyond simple holding and potentially accelerating institutional acceptance of digital assets.
Prepared from the source material with AI-assisted editing and checked against the supplied facts.
Open original source ↗