Franklin Templeton Brings Tokenized Collateral to Bybit for Crypto Trading

Franklin Templeton is extending its off exchange collateral program to Bybit, letting users trade with tokenized money market fund shares as backing.

Tokenized Money Market Funds as Crypto Collateral

Bybit users and wallet holders can pledge the shares, which represent about $686 million in net assets, to borrow USDT or USDC while still earning yield on the underlying assets. The shares run on the Benji Technology Platform, the firm’s blockchain based record keeping and transfer agency system, which currently pays a 3.7% annualized yield on its latest seven day rate.

How Off-Exchange Collateral Works

Users don’t have to move their assets to the exchange. Regulated custody platform ByCustody holds the underlying assets off-exchange, and their value is mirrored inside Bybit’s trading environment. This unlocks trading liquidity without giving up yield.

Franklin Templeton Crypto Partnerships Expand

The firm already offers similar programs to Binance and OKX customers. Sandy Kaul, head of digital assets and innovation, said investors can now use collateral more efficiently across top exchanges while earning yield, calling it a critical unlock for ecosystem growth. She added that it opens room for asset managers to design products for wallet-based investing.

Other Platforms Accepting Tokenized Funds

The trend is spreading. Crypto.com and Deribit let eligible institutional and professional users back trades, including derivatives, with BlackRock’s BUIDL fund.