CoinDesk
Franklin Templeton is bringing its tokenized money market fund shares to Bybit as eligible collateral for trading credit lines in USDT or USDC. The shares represent about $686 million in net assets, and holders can continue earning yield on the underlying assets while using their value to access trading liquidity.
Why it matters
The assets stay off-exchange with regulated custody platform ByCustody. Their value is mirrored in Bybit's trading environment, allowing users to pledge collateral without transferring the underlying holdings onto the exchange. The shares are issued through Franklin Templeton's Benji Technology Platform, which supports blockchain-integrated record keeping and transfers.
Franklin Templeton already offers its tokenized money market funds to customers of Binance and OKX. The Bybit expansion extends an approach that aims to make collateral more usable across trading venues while keeping the underlying assets in custody. Sandy Kaul, the firm's head of digital assets and innovation, described using collateral across major exchanges while continuing to earn yield as a key opportunity for investors and asset managers.
Market impact
Benji's latest seven-day rate corresponds to a 3.7% annualized yield. That rate is tied to the underlying fund and may change; the announcement does not specify a fixed return for users pledging shares on Bybit.
The partnership adds another example of tokenized funds being used to support crypto trading. Crypto.com and Deribit also allow eligible institutional and professional users to use BlackRock's BUIDL fund as collateral, including for derivatives positions. The broader development is the connection between tokenized fund holdings and exchange trading credit, with custody arrangements keeping the underlying assets off-exchange.
Frequently asked questions
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How can Franklin Templeton fund shares be used on Bybit?
Eligible users can pledge tokenized money market fund shares as collateral for trading credit lines in USDT or USDC.
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Do the underlying fund assets move onto Bybit?
No. ByCustody holds the underlying assets off-exchange, while their value is mirrored in Bybit's trading environment.
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Can users continue earning yield while pledging the shares?
Yes. The shares can serve as collateral while users continue earning yield on the underlying assets.
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What yield does the Benji fund currently report?
The latest seven-day rate corresponds to a 3.7% annualized yield. The rate is not described as fixed.
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Which other exchanges already offer Franklin Templeton's tokenized funds?
Franklin Templeton also offers its tokenized money market funds to customers of Binance and OKX.
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