Bybit and Franklin Templeton have formed a strategic collaboration that starts with letting eligible institutional clients use tokenised money market fund shares as off-exchange collateral for trading on Bybit. The companies announced the partnership on Sept. 28.
Building with @Bybit_Ins .
— Franklin Templeton Digital Assets (@FTDA_US) September 28, 2026
Bybit and Franklin Templeton Form Strategic Collaboration to Expand Access to Tokenized Investing
The wider collaboration launches with a new off-exchange collateral program that unlocks trading liquidity for institutional clients, alongside… pic.twitter.com/tjgglM0YwQ
The fund shares are issued through Benji, Franklin Templeton's blockchain-integrated recordkeeping and transfer agency platform. Clients pledge them through ByCustody, Bybit's institutional custody platform, and receive USDT or USDC trading credit lines on the exchange. The shares stay in regulated custody off-exchange, with their value mirrored inside Bybit's trading environment, so clients keep earning the fund's yield while using it to back positions.
"By expanding the range of high-quality collateral available through our off-exchange infrastructure, we are helping clients deploy capital more effectively while maintaining exposure to trusted, regulated investment products," said Yoyee Wang, Bybit's global head of RWA and TradFi.
The appeal for institutions is reduced counterparty exposure. Keeping collateral outside the exchange limits what a client stands to lose if the venue fails or is hacked, a risk Bybit knows well after losing about $1.5 billion in ether to North Korea-linked hackers in February 2025.
The arrangement is close to identical to one Franklin Templeton set up with Binance in February, which also let institutions pledge Benji-issued money market fund shares as off-exchange collateral. Franklin Templeton now has its tokenised funds accepted as collateral at Binance and at Bybit, which describes itself as the second-largest crypto exchange by trading volume. That strengthens Benji's position against competing tokenised treasury products as the preferred collateral asset for trading firms.
The partnership also reaches retail. Bybit and Franklin Templeton plan a tokenised wealth product on the Bybit exchange and the Mantle chain offering access to Franklin Templeton investment strategies, with details to come separately from Bybit and Mantle. The two firms will also run education programmes on topics such as goals-based investing and diversification for what they call wallet-based investors.
"For institutions, extending connectivity of the Benji Technology Platform to Bybit offers a trusted venue to put regulated, yield-bearing assets to work in digital markets," said Sandy Kaul, Franklin Templeton's head of digital assets and innovation.
The release does not name the fund whose shares can be pledged, define which clients are eligible, or specify the haircut Bybit applies when converting fund shares into trading credit. Those terms will determine how much capital efficiency the programme actually delivers.
