Key Highlights
- Asset manager Franklin Templeton has teamed up with Bybit to enable institutional traders to use tokenized fund shares from its Benji platform as off-exchange collateral.
- Institutional traders can obtain USDT or USDC credit through ByCustody while maintaining ownership of their fund positions.
- As of August 31, the Franklin OnChain U.S. Government Money Fund managed $686.64 million in net assets.
- Both firms are developing a wallet-integrated tokenized offering utilizing the Mantle blockchain infrastructure.
- As of August 31, Franklin Templeton’s total assets under management reached $1.83 trillion.
Global investment firm Franklin Templeton has extended its blockchain-based fund operations to cryptocurrency exchange Bybit. The collaboration enables qualified institutional investors to leverage their fund holdings as collateral for trading activities.
The strategic alliance was revealed on September 28, linking Franklin Templeton’s Benji Technology Platform with ByCustody, Bybit’s institutional custody service.
Through this arrangement, investors can commit Benji-issued money market fund tokens as collateral. These holdings remain securely held in custody, separate from the exchange infrastructure, while providing backing for credit facilities.
Qualified institutional participants can access credit denominated in USDT or USDC stablecoins. This mechanism allows them to execute trades on Bybit while preserving their original fund positions.
The framework ensures investors continue generating returns from their fund investments. Simultaneously, they obtain liquidity through stablecoin-denominated trading credit.
Mechanics of the collateral framework
ByCustody maintains the collateralized assets in segregated custody, isolated from exchange operations. A parallel tracking mechanism monitors asset valuations and applies them toward determining available trading capacity.
Bybit has previously integrated other tokenized real-world assets into its collateral system. Earlier in June, a quantitative trading firm utilized UBS’s tokenized money market fund through the Bybit and ByCustody infrastructure.
According to Yoyee Wang, who leads Bybit’s RWA and TradFi initiatives globally, institutional market participants demand operational flexibility and risk management capabilities comparable to conventional financial markets. She emphasized that this new offering enables clients to leverage regulated financial products while maintaining active capital deployment.
The underlying asset supporting this program is the Franklin OnChain U.S. Government Money Fund. This fund allocates capital primarily to U.S. government securities, cash positions, and repurchase agreements.
Net assets in the fund totaled $686.64 million as of August 31. The fund delivered a seven-day yield of 3.57 percent as of September 16.
Franklin Templeton’s broader blockchain initiatives
This partnership represents another milestone in Franklin Templeton’s tokenized collateral strategy. The firm established a comparable arrangement with Binance in February, implementing the same off-exchange custody model.
Franklin Templeton integrated Benji with MoonPay Trade in June. That integration enabled institutional users to transition seamlessly between stablecoin positions and tokenized fund allocations.
The asset manager has also established working relationships with Payward, Kraken’s parent company. This collaboration encompasses collateral utilization and treasury management through the Benji platform.
In August, Franklin Templeton received no-action relief from the Securities and Exchange Commission’s Division of Investment Management. This regulatory clearance permits Franklin Templeton mutual funds and exchange-traded funds to acquire shares of the blockchain-native fund.
Franklin Templeton and Bybit are jointly developing a wallet-native product leveraging the Mantle blockchain network. Neither company has disclosed timing or eligibility criteria for this upcoming offering.
Franklin Templeton’s total assets under management reached $1.83 trillion as of August 31. This represents growth from $1.79 trillion recorded at July’s conclusion.
The firm’s cash management division held $85 billion in assets at month-end. According to RWA.xyz analytics, assets under management on the Benji platform approached $669 million.
Market appetite for tokenized money market products has accelerated. The Bank for International Settlements estimated the sector exceeded $9 billion in value as of September 2025.
BlackRock’s USD Institutional Digital Liquidity Fund leads the tokenized money market category with $2.2 billion in assets. This fund serves as accepted collateral on Crypto.com and Deribit, while Binance extends off-exchange collateral privileges to its institutional client base as well.
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