Bybit Accepts Franklin Templeton’s Tokenized Money Fund Shares as Off-Exchange Collateral

Traders who want credit on a crypto exchange usually have to deposit collateral with the exchange first. Bybit is now letting eligible clients back their trades with shares of Franklin Templeton money market funds that stay in custody and keep earning yield.

The two companies announced a strategic collaboration on Monday. Its first piece lets clients post tokenized money market fund shares issued through Benji, Franklin Templeton’s blockchain-based recordkeeping and transfer agency platform, as off-exchange collateral for Bybit trades without depositing them.

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Clients pledge the fund shares through ByCustody, a custody platform, and receive USDT or USDC trading credit lines on Bybit in return. The shares never move to the exchange. Bybit mirrors their value inside its trading system, so clients can trade against them while the fund keeps paying its yield. Bybit said keeping the assets off the exchange cuts clients’ counterparty exposure.

“For institutions, extending connectivity of the Benji Technology Platform to Bybit offers a trusted venue to put regulated, yield-bearing assets to work in digital markets,” Sandy Kaul, Franklin Templeton’s head of digital assets and innovation, said in the release.

In April 2025, OKX and Standard Chartered launched a pilot to accept Franklin Templeton’s tokenized money market funds as off-exchange collateral, with the bank as custodian, and Franklin Templeton and Binance launched a similar program for institutional clients in February, with Binance’s custody partner Ceffu holding the assets.

“By expanding the range of high-quality collateral available through our off-exchange infrastructure, we are helping clients deploy capital more effectively while maintaining exposure to trusted, regulated investment products,” Yoyee Wang, Bybit’s global head of RWA and TradFi, said in the release.

The Bybit deal goes further than collateral. Franklin Templeton, which manages $1.7 trillion, also plans a tokenized wealth product, available on Bybit and the Mantle chain, for investors who hold assets in crypto wallets. The companies said Bybit and Mantle will share details separately, and that they will also run education programs for retail investors.

The deal comes days after CFTC staff let futures brokers invest customer funds in tokenized assets.

Related Listen: Robinhood’s Tokenized AMC Shares Spark a Fight Over What Stock Tokens Really Are

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