Franklin Templeton has expanded its tokenized collateral program to Bybit, making the crypto exchange the third major platform where investors can use the asset manager's tokenized money market fund shares as collateral while the underlying assets remain in regulated custody.

Tokenized money market funds represent ownership of traditional fund shares as blockchain-based tokens, allowing the holdings to be transferred, tracked, and pledged within digital asset platforms. Franklin Templeton, one of the world's largest asset managers, has been among the traditional finance firms active in this segment through its Benji platform.

Under the arrangement, Bybit users can pledge Franklin Templeton's tokenized money market fund shares to obtain trading credit in USDT or USDC while continuing to earn yield on the underlying holdings. The assets, valued at approximately $686 million in net assets, remain off-exchange with regulated custodian ByCustody, with their value mirrored within Bybit's trading environment. The structure allows the funds to support trading activity without leaving regulated custody, meaning posted collateral stays invested under custodial oversight rather than being transferred onto the exchange itself.

The Bybit rollout follows similar arrangements with Binance and OKX, giving Franklin Templeton's tokenized funds access across three major cryptocurrency trading platforms. Because the pledged shares continue to accrue yield, traders can back their positions without selling their fund holdings, reducing the opportunity cost of setting capital aside as collateral.

The expansion points to growing interest in tokenized traditional assets not just as investment products, but as productive collateral that can remain invested while supporting trading liquidity.

Franklin Templeton said the shares are issued through its Benji on-chain record-keeping and transfer platform, which maintains ownership records on-chain. The firm's tokenized money market fund currently carries an annualized yield of about 3.%, according to reports — a level that moves with the short-term interest rates underpinning money market returns.

The model is part of a broader push to bring tokenized real-world assets into crypto market infrastructure, where money market funds and other yield-bearing assets can serve simultaneously as investments, as a source of trading liquidity, and as collateral for market participants. Whether similar structures appear on additional venues, and whether collateral roles broaden beyond trading credit, are the observable details for tracking how this model develops.

Comparable structures have emerged elsewhere in the digital asset industry. Crypto.com and Deribit have similarly offered eligible institutional users the ability to use BlackRock's BUIDL tokenized fund to back their trades, including derivatives positions.