Franklin Templeton Brings Tokenized Funds to Bybit Trading Collateral

Franklin Templeton has collaborated with Bybit to allow institutional clients to use tokenized fund shares as off-exchange trading collateral. The partnership connects Franklin Templeton's Benji Technology Platform to Bybit's custody arm, ByCustody. Clients can pledge Benji-issued money market fund shares and access USDT or USDC credit lines without selling their fund shares.

The new program utilizes the same off-exchange model as Franklin Templeton's previous tokenized collateral deal with Binance. The deal aims to provide institutional investors with flexibility and risk controls similar to traditional markets, according to Bybit's global head of RWA and TradFi, Yoyee Wang.

The Franklin OnChain U.S. Government Money Fund backs this arrangement, holding $686.64 million in net assets as of August 31. The fund invests mainly in U.S. government securities, cash, and repurchase agreements, with a seven-day yield of 3.57 percent as of September 16.

Franklin Templeton has been expanding its tokenized fund business, having also launched a wallet-based product using the Mantle blockchain network in partnership with Bybit. The company plans to launch the product soon, but no details have been shared regarding its eligibility or launch date.