Users can leverage Franklin Templeton’s tokenized money market shares as collateral for USDT or USDC credit lines on Bybit, while still earning returns on their assets.
By Ian Allison|Edited by Omkar GodboleSep 28, 2026, 7:00 a.m. EDT2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Sandy Kaul at Consensus Miami 2026 (CoinDesk)SummaryShow- The underlying assets will be securely held off-exchange via ByCustody, with their value represented within Bybit's trading platform.
- Shares are issued through the Benji Technology Platform, Franklin Templeton's proprietary blockchain-based record-keeping system.
Franklin Templeton, a financial institution supportive of digital assets, is broadening its "off-exchange collateral program" to Bybit, enabling users of the exchange to utilize shares from its tokenized money market funds for cryptocurrency trading.
This collaboration allows investors on Bybit to use shares, which amount to approximately $686 million in net assets, as collateral to obtain stablecoins such as USDT or USDC, while still generating yield from the underlying assets, as detailed in a press release issued on Monday.
A notable aspect of this service is that users do not need to transfer their assets to Bybit. Instead, the underlying assets will be maintained off-exchange by ByCustody, with their value mirrored in Bybit's trading environment, facilitating both yield generation and trading liquidity, according to the release.
This initiative is not Franklin Templeton's first foray into off-exchange collateral partnerships; the firm has also made its tokenized money market funds available to clients of Binance and OKX. Sandy Kaul, Head of Digital Assets and Innovation at Franklin Templeton, emphasized that this development continues to enhance collateral mirroring in the crypto industry and the accompanying opportunities it presents.
“Now I can effectively utilize my collateral across various exchanges while earning yield on it,” Kaul explained in an interview. “This is essential for fostering growth in the ecosystem and presents a significant opportunity for us as asset managers to create products tailored for this wallet-based investment space.”
The shares are issued using Franklin Templeton's Benji Technology Platform, which integrates blockchain technology for record-keeping and transfer agency functions. Benji currently offers a 3.7% annualized yield, based on the latest seven-day rate.
This expansion aligns with a growing trend in the industry, as various crypto platforms are beginning to accept tokenized funds as collateral for trades. Platforms like Crypto.com and Deribit permit eligible institutional and professional users to use BlackRock’s BUIDL fund as collateral for their trading activities, including derivatives positions.
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Why it matters:
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