A $1.7 trillion asset manager and a crypto exchange best known for retail trading just built a bridge between money-market funds and a trading account. Neither side has to sell what it already owns to cross it.
Bybit and Franklin Templeton announced a strategic collaboration on September 28 centered on an off-exchange collateral program. Eligible institutional clients can pledge tokenized shares of Franklin Templeton’s money market fund, issued on its Benji Technology Platform, as collateral held in custody through Bybit’s institutional custody arm, ByCustody. In return, clients receive USDT or USDC trading credit lines on Bybit while the underlying fund shares stay off-exchange, keep earning yield, and mirror their value into the client’s trading environment. A second component brings a tokenized wealth product built on Franklin Templeton strategies onto Bybit’s exchange and the Mantle blockchain, aimed at retail wallet-based investors. It is the latest sign that tokenized fund shares are becoming collateral the same way tokenized deposits already are on the banking side.
“By expanding collateral ranges through off-exchange infrastructure, we help clients deploy capital more effectively,” said Yoyee Wang, Bybit’s global head of RWA and TradFi. Sandy Kaul, Franklin Templeton’s head of digital assets and innovation, said the firm is “partnering with Bybit to increase access to actively managed retail solutions” as tokenization reshapes how funds are held and traded.
The original insight here is custodial, not just technological. Every prior wave of crypto-native lending required investors to move an asset onto a platform and accept its counterparty risk to use it as collateral. This structure keeps the fund shares in Franklin Templeton’s own custody chain the whole time, which is the design compromise exchanges have been forced toward after a string of hot-wallet losses elsewhere in the industry this year. Asset managers get exchange distribution without exchange custody risk; that trade-off, more than the yield pitch, is what other large managers will be watching.
Source: PR Newswire
