Digital asset-friendly financial institution Franklin Templeton is extending its off-exchange collateral program to Bybit, allowing users of the exchange to utilize shares of Franklin Templeton’s tokenized money market funds for digital asset trading.
According to a press release issued on Monday, the collaboration empowers investors and account holders on the platform to pledge shares representing roughly $686 million in net assets as collateral to borrow stablecoins like USDT or USDC, while simultaneously accruing yield on the underlying holdings.
The announcement emphasized that participants will not need to transfer the underlying assets over to Bybit. Instead, the regulated custody solution ByCustody will maintain the underlying assets off-exchange, reflecting their worth inside the Bybit trading environment to unlock trading liquidity while generating returns, the statement explained.
This marks another step rather than a first for Franklin Templeton in off-exchange collateral initiatives; the organization already extends its tokenized money market fund offerings to clients on Binance and OKX. Sandy Kaul, Head of Digital Assets and Innovation at Franklin Templeton, noted that this effort advances the ongoing development of collateral mirroring within the digital asset sector alongside the new possibilities it creates.
“Consequently, I can now evaluate leading exchanges and act as an investor to leverage my collateral in a more efficient manner while generating returns on it,” Kaul remarked during an interview. “From my perspective, that represents a vital catalyst enabling the broader ecosystem to expand. Furthermore, it presents an exceptional opportunity for us as an asset manager to build products tailored specifically for this wallet-oriented investment channel.”
These shares are distributed via the Benji Technology Platform, which serves as Franklin Templeton’s proprietary, blockchain-linked framework for record-keeping and transfer agency. At present, Benji offers an annualized yield of 3.7%, derived from the most recent seven-day average.
This expansion mirrors a wider trend across the industry. Multiple cryptocurrency platforms currently accept tokenized funds as trade collateral. For instance, Crypto.com and Deribit permit qualified professional and institutional participants to back their trades, including derivatives transactions, using BlackRock’s BUIDL fund.
Originally published at https://www.coindesk.com/business/2026/09/28/crypto-friendly-institution-franklin-templeton-brings-its-tokenized-collateral-service-to-bybit.
