Franklin Templeton and crypto exchange Bybit announced Monday a program that lets clients pledge shares in Franklin Templeton's tokenized money market funds as collateral for crypto trading, according to the two companies' announcements as reported by Cointelegraph and CoinDesk. Under the arrangement, the underlying assets are held off-exchange in custody while their value is mirrored in Bybit's trading environment, allowing holders to keep earning yield on the fund shares while using them to support trades, according to CoinDesk. Clients can access credit lines or borrow stablecoins denominated in USDT or USDC to trade on Bybit without selling the fund shares or moving them onto the exchange, both outlets reported. Cointelegraph described the program as aimed at institutional investors, while CoinDesk described it as open to investors and wallet holders on the exchange.
Franklin Templeton and Bybit launch program allowing tokenized money market fund shares as trading collateral
Franklin Templeton and crypto exchange Bybit announced Monday a program that lets clients pledge shares in Franklin Templeton's tokenized money market funds as collateral for crypto trading, according to the two companies' announcements as reported by Cointelegraph and CoinDesk. Under the arrangement, the underlying assets are held off-exchange in custody while their value is mirrored in Bybit's trading environment, allowing holders to keep earning yield on the fund shares while using them to support trades, according to CoinDesk. Clients can access credit lines or borrow stablecoins denominated in USDT or USDC to trade on Bybit without selling the fund shares or moving them onto the exchange, both outlets reported. Cointelegraph described the program as aimed at institutional investors, while CoinDesk described it as open to investors and wallet holders on the exchange.
The shares are issued through Franklin Templeton's Benji platform, described by CoinDesk as the firm's proprietary blockchain-integrated record-keeping and transfer agency infrastructure. CoinDesk reported that Benji currently pays a 3.7% annualized yield based on the latest seven-day rate.
CoinDesk reported that a regulated custody platform, ByCustody, holds the underlying assets off-exchange, with the value mirrored inside Bybit's trading environment to allow yield generation alongside trading liquidity. Cointelegraph reported that eligible clients can pledge the fund shares while the assets remain in off-exchange custody.
Cointelegraph reported that Franklin Templeton and Bybit also plan a tokenized investment product for wallet users on Bybit and the Mantle network, and that details have not been disclosed.
CoinDesk reported that this is not Franklin Templeton's first off-exchange collateral partnership and that the firm also offers its tokenized money market funds to customers of Binance and OKX. Cointelegraph reported that BlackRock's USD Institutional Digital Liquidity Fund (BUIDL) is the largest tokenized money market fund at $2.2 billion and is accepted as collateral on Crypto.com and Deribit, with Binance allowing institutional clients to use BUIDL as off-exchange collateral. CoinDesk separately reported that Crypto.com and Deribit allow eligible institutional and professional users to use BUIDL to back trades, including derivatives positions.
Cointelegraph reported that the Bank for International Settlements valued the tokenized money market fund market at more than $9 billion as of September 2025. Cointelegraph also reported that Franklin Templeton's Benji platform had $1.98 billion in assets under management as of April, a figure it said has since declined to about $669 million, citing RWA.xyz data.
Sandy Kaul, Head of Digital Assets and Innovation at Franklin Templeton, told CoinDesk that investors can now look across the top exchanges and use their collateral more optimally while earning yield on it, describing this as a critical unlock for the ecosystem to grow and as an opportunity for the asset manager to design products for the wallet-based investing channel.
Where sources differ
- The value of the affected fund shares differs: CoinDesk reports the shares pledged represent about $686 million in net assets, while Cointelegraph reports the Benji platform's assets under management declined to about $669 million, citing RWA.xyz data.
- The eligible participants differ by description: Cointelegraph describes the program as being for institutional investors, while CoinDesk describes it as allowing the exchange's investors and wallet holders to pledge shares.
- No comment or statement from Bybit appears in either source, and its rationale or response is not provided.
- Neither source establishes the terms of the credit lines or borrowing arrangement, such as interest rates, limits, or eligibility criteria.
- No details are provided on the planned tokenized investment product for Bybit wallet users and the Mantle network beyond Cointelegraph's statement that it is planned and details are undisclosed.
- Neither source explains why the reported value of the Benji platform's assets differs (about $669 million versus about $686 million), or the dates to which each figure applies.
- The $9 billion market valuation attributed to the Bank for International Settlements appears in only one source and is not corroborated by the other.
- Neither source establishes whether the program is fully live or still being rolled out, beyond both describing the announcement as made on Monday, with CoinDesk dating its report September 28, 2026.
- Cointelegraph — original — by Cointelegraph by Sam Bourgi
- CoinDesk — by Ian Allison
Read the original at Cointelegraph