Crypto-friendly institution Franklin Templeton brings its tokenized collateral service to Bybit
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
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Summary
Franklin Templeton, a digital asset-friendly financial institution, has expanded its off-exchange collateral program to the cryptocurrency exchange Bybit. This allows Bybit users to pledge shares from Franklin Templeton’s tokenized money market funds, representing about $686 million in net assets, as collateral to borrow the stablecoins USDT or USDC while also earning yield on these assets. The underlying shares are held off-exchange by the regulated custody platform ByCustody, with their value mirrored within Bybit’s trading environment.
Why it matters
This development enables investors to use their tokenized collateral more efficiently across major exchanges without transferring underlying assets, unlocking trading liquidity and yield generation simultaneously. According to Franklin Templeton’s Head of Digital Assets, Sandy Kaul, this approach is a critical innovation for the crypto ecosystem's growth and offers asset managers the ability to design products tailored for wallet-based investing.
Key context
Franklin Templeton’s tokenized shares are issued through their proprietary Benji Technology Platform, which integrates blockchain into record keeping and transfer agency services. The company previously partnered with Binance and OKX for similar off-exchange collateral offerings. The minting of tokenized funds as tradable collateral aligns with a broader industry trend where platforms like Crypto.com and Deribit accept tokenized institutional funds, such as BlackRock’s BUIDL fund, as collateral.
Key numbers and entities
The tokenized collateral represents approximately $686 million in net assets. The shares currently yield an annualized return of 3.7%, based on a seven-day rate via the Benji Technology Platform. Key entities involved include Franklin Templeton, Bybit, and the custody platform ByCustody. Sandy Kaul, Head of Digital Assets and Innovation at Franklin Templeton, is quoted regarding the expansion.
What remains unclear
The source does not detail the regulatory framework governing the off-exchange custody or specifics about the security measures employed by ByCustody. It also does not clarify the customer eligibility requirements for using Franklin Templeton’s tokenized collateral on Bybit, nor how this integration impacts fees or user experience on the exchange.