Franklin Templeton Brings Tokenised Money Market Collateral to Bybit

Key points

Franklin Templeton's tokenised money market fund shares, representing approximately $686 million in net assets, can now be used as collateral on Bybit for USDT or USDC credit lines.
Underlying assets are held off-exchange via ByCustody, a regulated custody platform, with value mirrored in Bybit's trading environment so users continue earning yield.
Shares are issued through the Benji Technology Platform, Franklin Templeton's proprietary blockchain-integrated record-keeping and transfer agency infrastructure, currently yielding 3.7% annualised.
Bybit is the third major exchange to join this programme, following Binance and OKX, signalling a deliberate expansion across top-tier venues.
Competitors BlackRock BUIDL and platforms Crypto.com and Deribit are already active in the tokenised-fund-as-collateral space, making this a maturing rather than nascent market segment.

Franklin Templeton has extended its off-exchange collateral programme to Bybit, allowing the exchange’s users to pledge shares in the firm’s tokenised money market funds as collateral for USDT or USDC trading credit lines. The fund shares, which represent approximately $686 million in net assets, are issued via Franklin Templeton’s proprietary Benji Technology Platform and currently carry a 3.7% annualised yield based on the latest seven-day rate.

The structural logic of the arrangement is that underlying assets remain off-exchange, held through ByCustody, a regulated custody platform, with their value mirrored inside Bybit’s trading environment. Users therefore retain yield on the assets while unlocking stablecoin liquidity for trading, without transferring actual holdings onto the exchange. Sandy Kaul, Franklin Templeton’s Head of Digital Assets and Innovation, described the model as a meaningful step toward optimal collateral use across major exchanges.

Bybit joins Binance and OKX as venues where Franklin Templeton’s tokenised fund shares can serve as trading collateral, indicating that the firm is systematically working through the top-tier exchange landscape. The arrangement sits within a wider industry pattern: Crypto.com and Deribit already accept BlackRock‘s BUIDL fund as collateral for eligible institutional and professional users, including for derivatives positions. The competitive dynamic suggests tokenised fund collateral is becoming a differentiated product category rather than a novelty.

What this means

collateral & funding desk: Yield-bearing collateral that does not require on-exchange asset transfer changes the efficiency calculus for stablecoin borrowing; desks should assess whether existing margin arrangements at Binance, OKX, or Bybit can be restructured around this model to reduce idle cash drag.
treasury & allocator: Franklin Templeton's 3.7% annualised yield on collateral sitting off-exchange warrants a direct comparison to the cost of stablecoin credit lines the fund unlocks, since the net carry position determines whether the structure genuinely enhances returns or merely shifts counterparty exposure.
distribution & BD: Systematic coverage of Binance, OKX, and now Bybit by a single asset manager suggests exchange-embedded collateral programmes are becoming a primary distribution channel; competing fund managers without an equivalent wallet-native product face a narrowing window to negotiate comparable integrations.
compliance/legal/risk: ByCustody's role as the regulated custody layer warrants scrutiny of how value mirroring is legally characterised across jurisdictions, particularly where rehypothecation rules or exchange insolvency regimes could affect off-exchange asset segregation in a stress scenario.

Original source

Coindesk Markets desk

coindesk.com

Franklin Templeton Brings Tokenised Money Market Collateral to Bybit

Key points

Original source

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