Bybit and Franklin Templeton Launch Tokenized Money Market Fund Shares for Institutional Trading

This partnership signifies a growing trend of integrating traditional finance assets into the crypto ecosystem, potentially reshaping how institutions manage collateral.

• Bybit and Franklin Templeton announced a collaboration on September 28, 2026, allowing eligible institutions to use tokenized money market fund shares as collateral.
• Eligible clients can access credit lines in USDT or USDC while retaining ownership of their assets, which remain in regulated custody.
• The initiative aims to enhance capital efficiency and reduce counterparty risk in institutional trading.

• Tokenized money market funds are gaining traction as institutions seek yield-bearing assets that leverage blockchain technology.
• Franklin Templeton's Benji platform is the first U.S.-registered tokenized money market fund, previously managing nearly $2 billion in assets.
• The Bank for International Settlements valued the tokenized money market fund market at over $9 billion as of September 2025, indicating significant institutional interest.

On September 28, 2026, Bybit and Franklin Templeton unveiled a strategic partnership that allows eligible institutional clients to pledge tokenized shares of Franklin Templeton's money market funds, issued via the Benji platform, as off-exchange collateral. This innovative approach enables clients to access credit lines in stablecoins like USDT or USDC while keeping their underlying assets securely held in regulated custody through ByCustody.

The structure of this collaboration is designed to enhance capital efficiency and reduce counterparty risk. Bybit mirrors the value of the pledged assets internally, allowing institutions to trade without moving their assets onto the exchange. This means clients can continue to earn yield on their investments—reported at an annualized rate of 3.7%—while engaging in trading activities.

This partnership is part of a broader trend where traditional financial institutions are increasingly adopting tokenized assets. The demand for yield-bearing assets that also offer the efficiency of blockchain technology is rising, as evidenced by the success of comparable products like BlackRock's BUIDL, which has also been accepted as collateral on various platforms.

Franklin Templeton's Benji platform, despite experiencing fluctuations in assets under management (AUM), has positioned itself as a pioneer in the tokenized money market fund space. The recent announcement builds on Franklin Templeton's previous expansions of off-exchange collateral services to other trading venues, indicating a strategic push to integrate more traditional finance products into the crypto landscape.

Moreover, the partnership hints at future developments, including plans for a tokenized investment product targeting wallet users on Bybit and the Mantle network. While no specific timeline or details have been provided, this initiative could further enhance the utility of tokenized assets in the crypto market.

• Institutional traders: They gain access to enhanced liquidity options without sacrificing yield.
• Crypto exchanges: Increased competition as they adapt to similar collateral programs.
• Asset managers: They may need to reassess their strategies in light of new tokenized investment products.

• Adoption rates among institutional clients: Monitoring how quickly institutions embrace this collateral program will indicate its success.
• Regulatory responses: Any formal statements or actions from regulators could impact the viability of tokenized assets in trading.
• Market performance of tokenized funds: Observing the performance of Franklin Templeton's Benji fund and similar products will provide insights into market trends.