Bybit lets institutions pledge Franklin Templeton tokenized funds as collateral
Eligible clients can pledge Benji-issued money market fund shares for USDT or USDC credit lines while the assets stay in off-exchange custody.
Key points
- Franklin Templeton and Bybit announced the programme on Monday, according to CoinTelegraph.
- Eligible institutions can pledge fund shares issued through Franklin Templeton's Benji platform as trading collateral.
- The assets remain in off-exchange custody, and clients get credit lines in USDT or USDC to trade on Bybit.
- Benji's assets under management fell from $1.98 billion in April to about $669 million, per RWA.xyz data.
- The BIS valued the tokenized money market fund market at more than $9 billion as of September 2025.
Franklin Templeton has partnered with Bybit on a programme that lets institutional investors use tokenized money market fund shares as trading collateral, CoinTelegraph reports. The two companies announced the arrangement on Monday, saying it extends the use of such shares beyond a simple buy-and-hold investment.
Under the programme, eligible clients can pledge fund shares issued through Franklin Templeton's Benji platform while the underlying assets stay in off-exchange custody. In return, they gain access to credit lines denominated in the USDT or USDC stablecoins for trading on Bybit.
Collateral without selling
The structure means institutions do not have to sell the fund shares or move them onto the exchange to finance crypto trading. They can keep earning yield on their money market fund holdings while using those same assets as collateral.
Franklin Templeton and Bybit also plan a tokenized investment product for wallet users on Bybit and the Mantle network. The companies have not yet disclosed details of that product.
Benji assets and rivals
The move comes as demand for tokenized money market funds has grown significantly. The Bank for International Settlements valued the market at more than $9 billion as of September 2025, according to the article.
Franklin Templeton's Benji platform held $1.98 billion in assets under management as of April, but that figure has since fallen to about $669 million, according to RWA.xyz data cited by CoinTelegraph.
Why the deal matters
Competitors are already active in this area. BlackRock's USD Institutional Digital Liquidity Fund, known as BUIDL, is the largest tokenized money market fund at $2.2 billion and is accepted as collateral on Crypto.com and Deribit. Binance also lets institutional clients use BUIDL as off-exchange collateral.
The arrangement matters because it turns tokenized fund shares into working collateral for crypto trading rather than a passive holding. For Bybit, it adds a yield-bearing asset to its institutional offering; for Franklin Templeton, it widens the potential uses of its Benji-issued shares.