Franklin Templeton expands tokenized fund use with Bybit collateral program

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Franklin Templeton tokenized fund collateral

Highlights

Franklin Templeton and Bybit launched a program allowing institutional clients to pledge Benji platform fund shares as collateral for USDT or USDC credit lines without selling assets.
Tokenized money market funds now exceed $9 billion in value per the Bank for International Settlements, with widespread adoption among digital asset trading venues as of September 2025.
Franklin Templeton's Benji platform assets fell from $1.98 billion in April to $669 million, while BlackRock's BUIDL remains largest at $2.2 billion and is accepted as collateral by major exchanges.

Institutional collateral structure expands

As reported by Cointelegraph, citing Franklin Templeton and Bybit, eligible institutional clients can pledge shares of Franklin Templeton money market funds issued through the Benji platform to support trading activity on the crypto exchange.

The structure gives clients access to credit lines denominated in U.S. dollar-pegged stablecoins USDT or USDC without requiring them to sell the fund shares or move those assets onto the exchange. The companies say the arrangement allows investors to continue earning yield on their money market fund holdings while using them to finance crypto trades.

Franklin Templeton and Bybit are also planning a tokenized investment product for wallet users on Bybit and the Mantle network, although they have not disclosed further details.

Tokenized fund market gains traction

The program arrives as tokenized money market funds gain broader acceptance across digital asset trading venues. The Bank for International Settlements values the market at more than $9 billion as of September 2025, highlighting growing institutional interest in blockchain-based cash management products.

Franklin Templeton's Benji platform had $1.98 billion in assets under management as of April, although that total has since fallen to about $669 million, according to RWA.xyz data. BlackRock's USD Institutional Digital Liquidity Fund, BUIDL, remains the largest tokenized money market fund at $2.2 billion and is already accepted as collateral on Crypto.com and Deribit, while Binance allows institutional clients to use BUIDL as off-exchange collateral.

In our earlier article on the DTCC, Citi and Swift white paper, we noted that institutional finance is moving beyond tokenization pilots toward real implementation, making interoperability a key requirement. The paper argued that connected infrastructure can reduce fragmentation and operational complexity by enabling smoother movement of tokenized assets, digital cash, and collateral across networks, while also highlighting programmability, governance, and regulatory clarity as essential for scaling.

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