Crypto Exchanges Rush to Accept Tokenized Money Market Fund Collateral

Crypto exchanges are racing to accept tokenized money market fund collateral, and Franklin Templeton's new deal with Bybit is the latest example.

The arrangement allows eligible clients to pledge shares issued through Franklin Templeton's Benji Technology Platform, which are then used as collateral for trading credit lines on Bybit in USDT or USDC.

Bybit's withdrawal from the Canadian market in May 2023 means that Canadians cannot use this deal, despite the exchange having more than 80 million users worldwide and Franklin Templeton managing USD1.7 trillion in assets under management.

The firms described the program as the first initiative of a strategic collaboration, and Bybit said keeping collateral off the exchange reduces counterparty exposure and improves capital efficiency and treasury management.