Franklin Templeton Expands Tokenized Collateral Service to Bybit

Financial institution Franklin Templeton is expanding its tokenized collateral service to Bybit, allowing users to leverage shares in its money market funds for crypto trading. The partnership enables investors and wallet holders on Bybit to pledge shares as collateral, earning yield on the underlying assets while borrowing stablecoins USDT or USDC. The regulated custody platform ByCustody will hold the underlying assets off-exchange, mirroring their value on Bybit's trading environment.

The tokenized money market funds, issued through Franklin Templeton's Benji Technology Platform, currently pay a 3.7% annualized yield. This is not the institution's first off-exchange collateral partnership, as it also offers its tokenized funds to Binance and OKX customers. Sandy Kaul, Head of Digital Assets and Innovation at Franklin Templeton, sees this expansion as a key step in unlocking the growth potential of the crypto ecosystem.

Kaul notes that users can now use their collateral more optimally while earning yield on it. This is particularly significant for wallet-based investors who want to maximize their trading liquidity without sacrificing yields. The partnership reflects a broader industry trend, with several platforms accepting tokenized funds as collateral for trades.