Franklin Templeton expands tokenized fund collateral to Bybit for institutional trading

Franklin Templeton and Bybit have formed a strategic collaboration that lets eligible institutional clients use tokenized shares of Franklin Templeton’s money market fund as off-exchange collateral on Bybit. The arrangement is designed to let traders post the fund shares as collateral while keeping the assets outside the exchange’s custody.

According to the companies, the structure gives eligible clients access to trading credit while preserving their fund holdings. The collateral is tied to Franklin Templeton’s Benji platform, which issues the tokenized shares used in the program.

Collateral stays off-exchange while trading access opens

The setup separates custody from trading activity. Instead of moving the fund shares onto Bybit, clients can keep them off-exchange and still use their value to support trading on the platform.

The collaboration also extends beyond collateral use. Franklin Templeton and Bybit said they plan to introduce a tokenized wealth product for Bybit wallet users and the Mantle network, although further product details were not disclosed.

The latest agreement builds on a broader pattern of exchanges exploring tokenized fund collateral for trading use. Similar arrangements have previously been announced with other major venues, but the Bybit collaboration marks a direct extension of Franklin Templeton’s tokenized fund strategy into another exchange setting.