Bybit and Franklin Templeton Offer Tokenized Fund Shares as Trading Collateral

Bybit and Franklin Templeton have partnered to allow institutional clients to use tokenized fund shares as trading collateral. The tokenized shares are issued through Franklin Templeton's Benji Technology Platform, which is a blockchain-integrated transfer agency infrastructure.

The arrangement lets eligible institutions access USDT or USDC trading credit lines while continuing to earn yield on the underlying fund shares. This structure allows clients to avoid choosing between holding a yield-bearing asset and having capital available to trade.

According to Yoyee Wang, Bybit's global head of RWA and traditional finance partnerships, institutional adoption is accelerating, and investors expect the same flexibility and risk management standards they are accustomed to in traditional markets. Franklin Templeton manages $1.7 trillion in assets and framed the partnership as part of its broader push to expand access to tokenized investment products.

Tokenized money-market funds have emerged as one of the more actively adopted categories of real-world asset tokenization, since the underlying instrument is already highly liquid and low-risk, making it a natural candidate for use as trading collateral once it can be represented and transferred on a blockchain while keeping the custody arrangements traditional institutional clients require intact.