Franklin Templeton expands tokenized collateral service to Bybit

TECHNOLOGY

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Franklin Templeton expands tokenized collateral service to Bybit

The asset manager’s Benji platform now lets Bybit traders use tokenized money market fund shares as off-exchange collateral, building on a similar Binance program launched earlier this year.

by
Kaye Quema

Sep. 28, 2026

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Franklin Templeton is bringing its tokenized collateral program to Bybit, extending a service that lets institutional traders park yield-bearing assets with a regulated custodian while still using them as trading collateral.

The move follows a similar arrangement with Binance that went live on February 11, 2026. Two of the world’s largest crypto exchanges now accept Franklin Templeton’s BENJI tokens as off-exchange collateral.

How the Benji model actually works

Franklin Templeton’s Benji platform issues BENJI tokens on a strict one-to-one ratio with shares in its Franklin OnChain U.S. Government Money Fund, known as FOBXX.

The institution hands over its assets, receives a token that proves ownership, and that token can then be posted as collateral at a trading venue without the assets ever leaving a regulated custodian. The trader earns yield the whole time.

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Traditional collateral arrangements typically require moving assets onto an exchange, which creates counterparty risk and earns nothing. The Benji structure keeps assets with a third-party custodian, keeps them earning, and keeps them legally protected. Roger Bayston, Franklin Templeton’s Head of Digital Assets, has framed this as the core value proposition: maintaining custody and regulatory protections while offering yield-bearing collateral.

Benji currently runs on multiple blockchains, including Stellar and Ethereum, giving institutions flexibility in how they interact with the platform.

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$2 billion in AUM and a green light from the SEC

The Bybit expansion arrives as Franklin Templeton’s tokenized offerings cross $2 billion in assets under management.

In August 2026, the SEC issued a no-action letter permitting Franklin Templeton’s registered funds to use tokenized FOBXX and BENJI tokens for cash and collateral management. A no-action letter is not a full endorsement, but in regulatory terms it is the SEC saying it will not take enforcement action, which is close enough to a green light for most compliance teams.

What the Bybit expansion signals for the market

Bybit ranks among the largest derivatives exchanges globally, with a user base heavily skewed toward professional and institutional traders. Bringing BENJI collateral to Bybit means the product is now accessible to a trading population that genuinely needs efficient collateral solutions.

Today, crypto traders posting collateral typically use stablecoins or other crypto assets, which carry price volatility or de-peg risk. A tokenized U.S. government money market fund is, by comparison, about as stable as collateral gets.

For Bybit specifically, accepting regulated, yield-bearing tokenized collateral is a credibility move as much as a product feature. The exchange has worked to rebuild its institutional reputation, and a partnership with a 75-year-old asset manager carrying more than $1.5 trillion in traditional assets under management is not a subtle signal about the direction it wants to go.

Disclosure: This article was edited by Kaye Quema. For more information on how we create and review content, see our Editorial Policy.