TL;DR
- Franklin Templeton expands its tokenized money market collateral program to Bybit, giving eligible clients access to USDT and USDC trading credit.
- The underlying assets remain in off-exchange custody through ByCustody, while their value is mirrored on Bybit for trading purposes.
- The partnership reinforces the growing use of tokenized real-world assets as crypto collateral, while also planning broader wallet-based investment products.
Franklin Templeton is expanding its off-exchange collateral infrastructure to Bybit, connecting tokenized money market fund shares with crypto trading liquidity. The arrangement allows eligible investors to pledge assets issued through the Benji Technology Platform while keeping the underlying holdings outside the exchange.
The structure gives clients access to USDT or USDC trading credit lines without requiring the tokenized assets to be transferred onto Bybit. Instead, ByCustody holds the assets while their collateral value is reflected within Bybit’s trading environment. This allows the underlying holdings to continue generating yield while supporting trading activity.
Tokenized Funds Become Trading Collateral
The program centers on Franklin Templeton’s blockchain-based Benji infrastructure, which handles the issuance and recordkeeping of tokenized fund shares. The firm’s tokenized money market strategy is designed to provide exposure to assets such as U.S. government securities while adding blockchain-based transfer and settlement capabilities.
For crypto traders and institutions, the model addresses an important capital-efficiency issue. Investors can potentially keep productive assets generating returns while using them as collateral for digital-asset positions. That combination of yield and liquidity is one of the main practical applications of tokenization in financial markets.
Franklin Templeton has already pursued similar arrangements with other crypto platforms. In February 2026, the firm announced an off-exchange collateral program with Binance using Benji-issued tokenized money market funds and institutional custody infrastructure.
The Bybit expansion therefore extends an existing strategy rather than introducing an isolated product. It also shows how traditional investment vehicles can increasingly interact with crypto-market infrastructure without requiring every asset to sit directly on an exchange.
Bybit Partnership Extends Beyond Collateral
The collaboration also includes plans for a tokenized wealth product on Bybit and the Mantle network, giving wallet-based investors access to Franklin Templeton investment strategies. The companies have not yet released detailed information about the product’s fees, minimum investment, eligible strategies or launch timetable.
Franklin Templeton and Bybit also plan educational initiatives focused on concepts such as goals-based investing and diversification. This broader approach could help connect traditional asset-management products with users who increasingly interact with financial services through wallets and blockchain applications.
