Bybit announced a new offering that permits qualified institutional participants to use tokenized shares of Franklin Templeton’s money-market products as collateral for crypto trades. The shares are issued via the firm’s Benji platform and remain under custodial control outside of any exchange. In exchange, Bybit provides credit facilities denominated in USDT or USDC, letting users trade without liquidating or transferring the underlying tokens.
How the Collateral Mechanism Works
Eligible clients submit their tokenized fund shares to Bybit’s system, where the assets stay in off-exchange custody. The platform then extends a line of credit tied to stablecoins, which can be deployed for margin trading or other activities on the exchange. Because the tokens are never moved onto Bybit, investors continue to earn the yield generated by the money-market holdings while simultaneously accessing liquidity for crypto positions.
Market Context and Scale
The demand for tokenized money-market instruments has risen sharply, with the Bank for International Settlements estimating the sector’s value at over $9 billion as of September 2025. Franklin Templeton’s Benji platform reported nearly $2 billion in assets under management in April, though recent data indicates a decline to roughly $669 million. By comparison, BlackRock’s USD Institutional Digital Liquidity Fund, valued at $2.2 billion, is already accepted as collateral on platforms such as Crypto.com, Deribit, and Binance.
Future Product Plans
Beyond the current collateral service, Bybit and Franklin Templeton are developing a tokenized investment product aimed at retail wallet users on both Bybit and the Mantle network. Details of the upcoming offering have not been disclosed, but the collaboration suggests a broader strategy to bring tokenized real-world assets to a wider audience.
Why it matters
The integration of tokenized money-market shares as collateral represents a tangible step toward bridging traditional finance and crypto markets. By allowing institutions to retain yield on their holdings while unlocking liquidity for digital-asset trading, the partnership addresses a key friction point for professional investors. Moreover, the move underscores the expanding role of tokenized real-world assets in the broader crypto ecosystem, potentially prompting other exchanges to adopt similar collateral frameworks.
