Key Highlights
- Franklin Templeton has joined forces with Bybit, enabling institutional investors to leverage Benji-issued fund shares as off-exchange collateral for trading.
- Institutional clients gain access to USDT or USDC borrowing facilities via ByCustody 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.
- A wallet-integrated tokenized offering utilizing the Mantle blockchain network is under development by both firms.
- As of August 31, Franklin Templeton oversaw $1.83 trillion in total assets under management.
Franklin Templeton has broadened the reach of its tokenized fund offerings through a new collaboration with Bybit. This arrangement enables qualified institutional participants to utilize their fund holdings as collateral for trading activities.
The strategic alliance was unveiled on September 28, establishing a connection between Franklin Templeton’s Benji Technology Platform and Bybit’s custodial service, ByCustody.
Through this arrangement, participants can collateralize their Benji-issued money market fund positions. These holdings remain in secure custody outside the exchange infrastructure while their underlying value supports trading capacity.
Qualified participants can subsequently access borrowing facilities denominated in USDT or USDC. This mechanism enables trading activity on Bybit while preserving their fund holdings intact.
The framework ensures participants continue receiving yield from their fund positions while simultaneously obtaining access to stablecoin-based trading credit.
Understanding the collateral mechanism
ByCustody maintains the underlying holdings separate from the exchange platform. A parallel tracking system monitors these asset values and translates them into available trading capacity.
Bybit has previously incorporated other tokenized real-world assets into its collateral framework. A quantitative trading firm utilized UBS’s tokenized money market fund through Bybit and ByCustody services in June.
According to Yoyee Wang, Bybit’s global head of RWA and TradFi, institutional market participants seek operational flexibility and risk management capabilities comparable to conventional financial markets. She noted the new offering allows participants to leverage regulated financial products while maintaining active capital deployment.
The Franklin OnChain U.S. Government Money Fund serves as the foundation for this collaboration. The fund primarily allocates to U.S. government securities, cash positions, and repurchase agreements.
As of August 31, the fund maintained $686.64 million in net assets. Its seven-day yield registered 3.57 percent as of September 16.
Franklin Templeton’s broader digital asset strategy
This collaboration represents another milestone in Franklin Templeton’s tokenized collateral initiatives. The firm established a comparable arrangement with Binance in February, employing the identical off-exchange framework.
Franklin Templeton additionally integrated Benji with MoonPay Trade in June. That collaboration enabled institutional participants to transition between stablecoin positions and tokenized fund exposure.
The asset manager has also collaborated with Payward, Kraken’s parent entity. This partnership encompasses collateral applications and treasury management utilizing Benji.
In August, the Securities and Exchange Commission’s Division of Investment Management granted no-action relief. This authorization permits Franklin Templeton mutual funds and exchange-traded funds to maintain positions in the blockchain-based fund.
Franklin Templeton and Bybit are also developing a wallet-integrated product leveraging the Mantle blockchain infrastructure. Neither company has disclosed timing or eligibility criteria for this forthcoming offering.
Franklin Templeton disclosed $1.83 trillion in aggregate assets under management as of August 31. This represents an increase from $1.79 trillion recorded at July’s conclusion.
The firm’s cash management portfolio reached $85 billion at month-end. According to RWA.xyz tracking data, the Benji platform managed approximately $669 million in assets.
Interest in tokenized money market funds has accelerated. The Bank for International Settlements estimated the sector exceeded $9 billion in value as of September 2025.
BlackRock’s USD Institutional Digital Liquidity Fund leads the tokenized money market fund category with $2.2 billion in assets. This fund serves as accepted collateral on Crypto.com and Deribit, while Binance similarly permits institutional participants to employ it as off-exchange collateral.
