Franklin Templeton Expands Tokenized Collateral Service to Bybit Exchange
Franklin Templeton joins Bybit for tokenized lending
Digital asset-friendly financial institution Franklin Templeton has expanded its off-exchange collateral program to include the crypto exchange Bybit. This partnership allows users on the platform to use shares from Franklin Templeton's tokenized money market funds as collateral.
Investors can pledge these shares to borrow stablecoins, which are digital currencies pegged to the US dollar like USDT or USDC. A stablecoin is a type of cryptocurrency designed to maintain a steady value. While using the shares as collateral, investors continue to earn yield on the underlying assets.
How the custody setup works
- The underlying assets remain held off-exchange through a regulated custody platform called ByCustody.
- The value of these assets is mirrored within Bybit's trading environment to enable trading liquidity.
- The shares are issued via the Benji Technology Platform, Franklin Templeton's proprietary blockchain infrastructure.
- According to the latest seven-day rate, Benji currently pays a 3.7% annualized yield.
What the collaboration enables
Sandy Kaul, Head of Digital Assets and Innovation at Franklin Templeton, stated that this arrangement allows investors to use their collateral more optimally across top exchanges while still earning yield. She noted that this is a critical step for ecosystem growth and offers an opportunity to design products for wallet-based investing.
This move follows similar partnerships Franklin Templeton has established with Binance and OKX. The firm manages about $686 million in net assets for these tokenized shares.
Industry trend toward tokenized collateral
The expansion reflects a wider pattern in the crypto industry where platforms accept tokenized funds as collateral for trades. For instance, Crypto.com and Deribit allow eligible institutional users to use BlackRock's BUIDL fund to back trades, including derivatives positions.
Source
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.