Crypto-friendly institution Franklin Templeton brings its tokenized collateral service to Bybit

Franklin Templeton is expanding its off-exchange collateral program to the crypto exchange Bybit, enabling the platform’s users to pledge shares of the asset manager’s tokenized money market funds as collateral for stablecoin credit lines. According to the firm’s announcement, customers can borrow USDT or USDC using those shares while continuing to earn yield on the underlying funds.

Under the arrangement, the actual fund assets remain held off-exchange with regulated custodian ByCustody. Bybit will mirror the value of those off-exchange holdings inside its trading environment, allowing users to access trading liquidity and credit without transferring the underlying securities onto the exchange.

The tokenized shares are issued through Franklin Templeton’s Benji Technology Platform, the firm’s blockchain-integrated record-keeping and transfer agency system. Benji’s shares currently pay a 3.7% annualized yield based on the latest seven-day rate, the company said. The shares covered by the program represent roughly $686 million in net assets.

Franklin Templeton already runs similar off-exchange collateral integrations with Binance and OKX, and the firm described the Bybit expansion as part of a broader buildout of collateral mirroring in the crypto ecosystem. Sandy Kaul, Franklin Templeton’s head of digital assets and innovation, said the arrangement helps investors use collateral more efficiently while earning yield. The move follows a wider industry pattern in which exchanges accept tokenized funds as collateral—other platforms such as Crypto.com and Deribit allow qualified users to use tokenized exposures like BlackRock’s BUIDL fund to back trading positions.