Institutional clients on Bybit can now pledge tokenized money market fund shares from Franklin Templeton as collateral and trade against them without moving the shares onto the exchange. The announcement, dated September 28, calls this the first step in a wider collaboration that also reaches wallet-based retail investors.
Franklin Templeton reports about $1.7 trillion under management, and Bybit says it has more than 80 million users. The collateral program is the concrete part. Details of the retail product are still to come.
A pledge instead of a deposit
The shares are issued through Benji, Franklin’s own blockchain-based recordkeeping and transfer agency platform. A client pledges them through ByCustody, a custody platform, and gets a USDT or USDC credit line on Bybit in return. The shares themselves stay in custody. Bybit mirrors their value inside its trading environment, so the client keeps collecting the fund’s yield while the same holding backs a position.
Bybit is selling this as trading liquidity against a regulated, interest-paying asset with less counterparty exposure, since nothing has to be handed to the exchange. It describes the program as part of a growing set of institutional tools. Yoyee Wang, its global head of RWA and TradFi, said institutions increasingly expect the same flexibility and risk standards from crypto venues that they get in traditional markets. Sandy Kaul, who heads digital assets and innovation at Franklin Templeton, described Bybit as a trusted venue where institutions can put regulated, yield-bearing assets to work. Kaul added that the retail side should widen access to actively managed products for wallet users.
Off-exchange settlement isn’t new at Bybit. Since 2025 it has connected custodians including Zodia Custody and Sygnum, so institutions can keep assets away from the exchange while they trade. In the Sygnum setup, for instance, trading profit and loss settles automatically every eight hours. What Franklin adds is a collateral type that pays interest while it sits there. The deal also lands days after Bybit put stock-linked perpetual contracts into Copy Trading, another push toward traditional-asset exposure.
Binance did the same thing in February
Franklin Templeton launched a matching program with Binance on February 11, with Ceffu as the custody layer. The structure is nearly identical: Benji-issued shares stay in regulated custody while their value is mirrored on the exchange. The two companies put the demand down to institutions wanting stable, yield-bearing collateral that settles around the clock. Since then Franklin has kept adding platforms. Payward, Kraken’s parent, announced a collaboration in May that includes integrating Benji and co-designing tokenized yield products. MoonPay followed in June, and HashKey Exchange listed a Franklin on-chain fund on its Earn channel on August 24. Bybit is the latest name on the list.
Retail plans and the terms the release leaves out
The second track is aimed at wallet users. Bybit and Franklin say a tokenized wealth product will run on the Bybit exchange and on Mantle, giving access to Franklin’s investment strategies. The release doesn’t say what kind of strategies, only that they’re Franklin’s. Mantle is familiar territory for Bybit. It added deposits and withdrawals of tokenized U.S. equities on the network in November, and in March it said its Mantle Vault on On-Chain Earn, launched in December, had reached $200 million, up from $100 million in early January. For the new product, the release gives no name, fee, minimum or start date, and Bybit and Mantle say they’ll share details separately. The companies also plan content and education programs on goals-based investing and diversification.
The institutional side has gaps too. The release doesn’t say which fund in Franklin’s suite qualifies or on what terms credit is extended, from loan-to-value ratios to haircuts and fees. Nor does it explain how a margin shortfall would be handled against shares held in custody. Settlement frequency isn’t stated, and neither is what makes a client eligible. Bybit says the structure reduces counterparty exposure. Franklin’s Roger Bayston said of the Binance version that pledged assets aren’t rehypothecated or moved onto the exchange, and whether the same terms apply here isn’t spelled out. The program is new, so there’s no record yet of how it behaves in a fast market.
