Franklin Templeton is extending its tokenized money market fund infrastructure to Bybit, giving eligible institutional clients a new route to crypto trading liquidity without transferring their yield-bearing assets onto the exchange. The partnership, announced Sept. 28, adds another bridge between traditional asset management and digital-asset markets. For institutional treasurers, the arrangement addresses a familiar trade-off: keeping capital in income-generating funds while still being able to put it to work in crypto trading.

Under the program, eligible investors can pledge shares of Franklin Templeton funds issued through its Benji Technology Platform as off-exchange collateral. In return, clients gain access to USDT or USDC trading credit lines on Bybit while the underlying assets continue generating income.

Tokenized Assets Meet Crypto Liquidity

Tokenization represents fund shares as digital tokens recorded on a blockchain, allowing traditional investment products to move through digital-asset workflows such as settlement and collateral posting. Rather than being transferred directly to Bybit, the collateral remains in custody through ByCustody. The value of the tokenized holdings is mirrored within Bybit's trading environment, enabling the assets to support trading activity while staying outside the exchange.

The structure offers several potential benefits for institutional users:

• Access to USDT or USDC trading credit
• Continued yield on eligible underlying assets
• Off-exchange custody of the collateral
• Greater flexibility for institutional treasury management

Franklin Templeton has previously positioned tokenized money market funds as instruments that can combine traditional money-market exposure with blockchain-based settlement and collateral functionality.

A Broader Push Into Tokenized Finance

The Bybit arrangement builds on Franklin Templeton's wider expansion of tokenized collateral services across digital-asset venues; the asset manager has also pursued similar structures with other major crypto exchanges.

Bybit, meanwhile, has been developing its own institutional collateral infrastructure. Its Bank Triparty service, launched in July, allows eligible institutions to use U.S. dollars or Treasury bills held with regulated banking partners to obtain USDT financing while retaining exposure to the collateral. Together, these arrangements show how custody and counterparty-risk management have become central design considerations as traditional assets enter crypto trading venues.

The latest partnership reflects a broader shift toward using tokenized real-world assets as productive collateral. Rather than selling traditional investment assets or leaving them idle, institutions can potentially deploy them to support trading liquidity while maintaining their underlying economic exposure.

Franklin Templeton and Bybit said the collaboration will also extend into tokenized wealth products and educational initiatives for wallet-based investors, signaling a broader effort to connect regulated investment products with blockchain-based financial markets. How those follow-on products take shape will offer a measure of how far the tokenized-collateral model reaches beyond trading credit.