Franklin Templeton's tokenized fund shares now approved for collateral on Bybit exchange
Qualified institutional traders can now use Benji platform fund shares as collateral to access stablecoin credit facilities without moving their holdings to exchange wallets.
A new collaboration between Franklin Templeton and Bybit has introduced a system enabling institutional market participants to utilize tokenized money market fund shares as collateral for trading activities, taking their functionality beyond traditional passive investment strategies.
According to Monday's announcement from both organizations, qualified institutional participants may now use fund shares distributed via Franklin Templeton's Benji platform as pledged collateral while maintaining custody of these assets off the exchange. Through this arrangement, participants gain access to borrowing facilities in USDT or USDC stablecoins for conducting trades on Bybit's platform, eliminating the need to liquidate their fund positions or move them onto the trading venue.
This structure enables institutional participants to continue generating returns from their money market fund positions while simultaneously leveraging those same holdings to support their cryptocurrency trading operations.
Beyond the collateral program, Franklin Templeton and Bybit have revealed intentions to launch a tokenized investment offering targeted at wallet holders on both Bybit's platform and the Mantle network, though specific details regarding this product remain undisclosed at this time.
This initiative arrives amid substantial expansion in the tokenized money market fund sector, with the Bank for International Settlements reporting that the market reached a valuation exceeding $9 billion by September 2025.
As of April, Franklin Templeton's Benji platform managed $1.98 billion in total assets under management, though data from RWA.xyz indicates this amount has subsequently fallen to approximately $669 million.
The market's leading tokenized money market fund is BlackRock's USD Institutional Digital Liquidity Fund (BUIDL) with $2.2 billion in assets, which serves as accepted collateral on both Crypto.com and Deribit exchanges, while Binance has implemented a program permitting institutional participants to utilize BUIDL as off-exchange collateral for trading purposes.