Franklin Templeton Puts $686M Money Market Fund on Bybit's Collateral Menu 🏦

Franklin Templeton has partnered with Bybit to let eligible institutional clients pledge tokenized shares of its money market funds as off-exchange trading collateral, the firms announced Monday. The arrangement lets investors unlock liquidity from their fund holdings without selling them or moving them onto the exchange, while continuing to earn yield on the underlying assets.

Fund shares are issued through Franklin Templeton's Benji Technology Platform and held off-exchange in ByCustody, Bybit's institutional custody service. Bybit mirrors the value of those assets within its trading system and extends credit lines denominated in either USDT or USDC to qualified clients for trading activity. Franklin Templeton manages approximately $1.7 trillion in assets, and the tokenized money market fund linked to the program currently has net assets of approximately $686 million.

The companies are also planning a tokenized investment product for wallet users on Bybit and on the Mantle network, though details have not yet been disclosed. Demand for tokenized money market funds has climbed sharply, with the Bank for International Settlements valuing the segment at more than $9 billion as of September 2025. Franklin Templeton's broader Benji platform held $1.98 billion in assets under management as of April, a figure that has since declined to about $669 million according to RWA.xyz data.

The launch follows a no-action letter issued by the U.S. Securities and Exchange Commission's Division of Investment Management on 12 August regarding investment in a Franklin OnChain Money Fund that invests in U.S. government money market instruments. Elsewhere in the tokenized fund sector, BlackRock's USD Institutional Digital Liquidity Fund (BUIDL) remains the largest product at $2.2 billion and is already accepted as collateral on Crypto.com and Deribit, while Binance permits institutional clients to pledge BUIDL as off-exchange collateral.