Bybit now accepts tokenized shares of Franklin Templeton money market funds as collateral for stablecoin credit lines, giving institutional investors a new way to put their cash to work without selling anything.
The companies announced the deal Monday. Under the arrangement, eligible clients can pledge fund shares issued through Franklin Templeton’s Benji platform while the assets stay in off-exchange custody. They get credit lines in USDT or USDC to trade on Bybit, with the fund shares staying put instead of moving onto the exchange.
This setup lets institutions keep earning yield on their money market fund holdings while using those assets to finance crypto trading. It is a practical path for firms that want exposure to crypto without touching the underlying shares.
How the collateral arrangement works
The pledge structure is simple at its core. Institutions hold tokenized shares of a Franklin Templeton money market fund through Benji, a platform built by the asset manager. Those shares sit in custody outside the exchange, meaning they are held somewhere other than Bybit’s own infrastructure.
When a client wants to trade, they pledge some or all of those shares as collateral. Bybit then extends a credit line in USDT or USDC, which the client uses to fund trades on the exchange. The fund shares never move onto Bybit itself.
This matters because the custody arrangement keeps the underlying assets separate from the trading activity. The investor holds the shares, and the exchange borrows against them.
What Franklin Templeton brings to the deal
Franklin Templeton runs Benji, the platform that issues the tokenized fund shares used as collateral. As of April, Benji had $1.98 billion in assets under management, according to RWA.xyz data. That figure has since declined to about $669 million.
The company has spent years building out its crypto offerings, and this partnership extends that reach into trading collateral. The arrangement treats tokenized fund shares as something with value beyond a simple buy-and-hold investment.
Franklin Templeton’s position in the tokenized money market space is worth noting. Its Benji platform competes with BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), the largest tokenized money market fund at $2.2 billion.
Who else uses BUIDL as collateral
BUIDL is the biggest name in tokenized money market funds right now. It is accepted as collateral on Crypto.com and Deribit, and Binance allows institutional clients to use BUIDL as off-exchange collateral.
The comparison is useful. Franklin Templeton’s Benji platform has roughly half the assets of BUIDL, according to the figures cited. Both funds serve the same purpose — giving institutional investors a liquid, tokenized way to hold cash — but BUIDL has clearly won the size contest.
The market picture
The Bank for International Settlements valued the tokenized money market fund market at more than $9 billion as of September 2025. That figure reflects the growing appetite for these instruments among institutional investors.
The Franklin Templeton/Bybit arrangement fits squarely within that trend. It is one more way for firms to use these funds for purposes beyond holding cash.
What comes next
Franklin Templeton and Bybit are also planning a tokenized investment product for wallet users on Bybit and the Mantle network. They have not yet disclosed details of the product.
The timing of that release is unclear. The companies have not said when it will launch or what it will contain beyond the general description.
| Event | Detail |
|---|---|
| Announcement | Made Monday by Franklin Templeton and Bybit |
| Collateral options | USDT or USDC credit lines |
| Custody | Off-exchange, through Franklin Templeton’s Benji platform |
| Asset manager | Franklin Templeton |
| Exchange | Bybit |
| Largest tokenized fund | BUIDL, $2.2 billion |
Our view of the deal
This is a practical product for a specific audience. Institutional investors who already hold tokenized money market funds now have a reason to keep them rather than sell them.
The collateral arrangement keeps the underlying assets safe. The pledge structure means the shares stay in custody outside the exchange, which is a meaningful feature for firms that want to hedge crypto exposure without losing control of their underlying positions.
The deal also puts Franklin Templeton in a stronger position in the tokenized fund ecosystem. Its Benji platform already manages billions in assets, and this partnership adds a new revenue stream by tying those assets to trading activity.
For Bybit, the arrangement expands its collateral offerings. A stablecoin credit line backed by tokenized fund shares is a different kind of exposure than the spot and derivatives trading the exchange already offers.
There is risk here too. Tokenized money market funds are still relatively new, and their regulatory status remains unsettled in many jurisdictions. The fact that BUIDL is accepted as collateral on multiple platforms suggests some confidence in the model, but it is not a guarantee.
The market picture is encouraging. $9 billion in value is a real number, and the growth trajectory suggests more firms will enter the space. Franklin Templeton’s entry with Bybit is a notable move, and it puts the firm alongside BlackRock’s BUIDL as a provider of tokenized collateral solutions.
The product for Bybit and Mantle wallet users could be the bigger play down the road. If it delivers what the companies promise, it could give retail investors a way to access tokenized funds directly, which would be a notable shift from the current institutional-only landscape.
For now, the collateral arrangement is live, and eligible institutions can start pledging their tokenized fund shares today. The underlying logic is sound: why sell an asset that earns yield when you can borrow against it instead?
Source material: “Bybit accepts Franklin Templeton tokenized funds as trading collateral,” Cointelegraph.
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