Bybit and Franklin Templeton launch off-exchange collateral program using tokenized Benji fund shares

Bybit and Franklin Templeton have launched an off-exchange collateral program that lets eligible clients use Benji-issued tokenized money market fund shares as collateral for trading on Bybit. The firms said the arrangement is designed for customers using USDT or USDC trading credit, while the underlying tokenized assets remain in off-exchange custody.

In a Bybit press release, the exchange said the program forms part of a broader collaboration with Franklin Templeton around tokenized investing. Franklin Templeton’s Benji Technology Platform issues the tokenized fund shares, while ByCustody is used to hold the assets in custody.

The companies said the setup is aimed at eligible clients who want to pledge tokenized fund shares without moving them onto the trading venue itself. That structure separates collateral use from exchange custody, a distinction that is central to the program’s design.

Tokenized fund shares move into trading collateral

The announcement links Franklin Templeton’s blockchain-based fund infrastructure more directly with a crypto exchange’s margin and credit workflow. Rather than simply tokenizing a fund product, the collaboration allows those tokenized shares to function as off-exchange collateral inside Bybit’s trading environment.

Bybit and Franklin Templeton did not say in the release that the program is broadly available to all users, and the launch appears limited to eligible clients. The firms also framed the arrangement around access to tokenized investing rather than as a change to the underlying fund itself.

For crypto traders and institutions, the practical shift is the collateral mechanics: tokenized money market fund shares can now be pledged for trading credit while remaining in custody off the exchange. The companies said that structure is intended to connect tokenized assets with trading utility without requiring a conventional transfer of the collateral onto the venue.