Key Highlights
- Franklin Templeton has integrated its Benji platform with Bybit, enabling institutional investors to pledge fund shares as off-exchange collateral for crypto trades.
- Through ByCustody, clients gain access to USDC or USDT credit facilities while maintaining ownership of their fund positions.
- As of August 31, the Franklin OnChain U.S. Government Money Fund managed $686.64 million in net assets.
- The partnership includes plans for a wallet-integrated tokenized solution leveraging the Mantle blockchain.
- As of August 31, Franklin Templeton oversaw $1.83 trillion in total assets under management.
Franklin Templeton has extended its blockchain-based fund offerings to Bybit, creating new opportunities for institutional investors to utilize tokenized assets as trading collateral.
The collaboration, unveiled on September 28, bridges Franklin Templeton’s Benji Technology Platform with ByCustody, Bybit’s institutional custody solution.
The arrangement allows institutions to deposit money market fund shares issued through Benji. These assets remain secured in custody, separate from the exchange infrastructure, while supporting credit availability for trading activities.
Participating clients receive credit lines denominated in USDC or USDT. This mechanism enables active trading on Bybit’s platform without liquidating underlying fund positions.
The framework ensures clients continue generating returns from their fund holdings. Simultaneously, they obtain stablecoin-based credit for market participation.
Understanding the collateral mechanism
ByCustody maintains custody of the pledged assets separate from exchange operations. A mirrored valuation system continuously monitors asset worth and adjusts available trading capacity accordingly.
Bybit has previously incorporated other tokenized real-world assets into its collateral framework. Earlier in June, a quantitative trading firm utilized UBS’s tokenized money market product via Bybit and ByCustody services.
According to Yoyee Wang, Bybit’s global head of RWA and TradFi, institutional market participants demand operational flexibility paired with risk management comparable to conventional finance. Wang noted this offering enables clients to leverage SEC-regulated financial products while maintaining capital deployment strategies.
The Franklin OnChain U.S. Government Money Fund serves as the foundation for this collateral program. The fund allocates capital primarily to U.S. Treasury securities, liquid cash positions, and repurchase agreements.
Net assets reached $686.64 million as of August 31. The fund delivered a seven-day yield of 3.57 percent as of September 16.
Expanding blockchain integration strategy
This Bybit collaboration represents the latest in Franklin Templeton’s series of tokenized collateral initiatives. The asset manager established a comparable arrangement with Binance in February, implementing the same segregated custody approach.
Franklin Templeton connected Benji to MoonPay Trade in June. That integration facilitated institutional transitions between stablecoin holdings and tokenized fund positions.
The company has established relationships with Kraken’s parent entity Payward as well. That agreement encompasses collateral applications and treasury management through Benji’s infrastructure.
In August, the Securities and Exchange Commission’s Division of Investment Management granted no-action relief. This regulatory accommodation permits Franklin Templeton’s conventional mutual funds and ETFs to hold positions in the blockchain-native fund.
Franklin Templeton and Bybit are developing a wallet-native product utilizing the Mantle blockchain network. Launch timing and qualification criteria remain undisclosed.
Franklin Templeton’s total assets under management reached $1.83 trillion as of August 31. This represents growth from $1.79 trillion recorded at July’s close.
Cash management assets totaled $85 billion at month-end. Assets under management on the Benji platform approached $669 million, based on RWA.xyz tracking data.
Interest in tokenized money market products continues expanding. The Bank for International Settlements assessed the sector at over $9 billion as of September 2025.
BlackRock’s USD Institutional Digital Liquidity Fund leads the tokenized money market category with $2.2 billion in assets. Multiple exchanges including Crypto.com and Deribit accept it as collateral, while Binance offers institutional clients off-exchange collateral functionality with the product.
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