Breaking: Franklin Templeton Partners With Bybit to Offer Tokenized Money Market Funds

Franklin Templeton has partnered with Bybit to offer tokenized money market fund access, giving eligible clients a new way to use fund shares as off-exchange trading collateral.

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Franklin Templeton Brings Tokenized Fund Shares to Bybit

Franklin Templeton has teamed up with crypto trading exchange Bybit to gain access to tokenized money market funds for qualified institutional investors. The program enables users to use fund shares as collateral in trading on Bybit.

Franklin Templeton issues the tokenized shares through its Benji Technology Platform. Clients can pledge those shares through ByCustody, Bybit’s institutional custody platform.

Eligible investors can then be granted USDT or USDC credit lines to use for trading activity. The underlying assets are not on-exchange and are only acknowledged as part of the trading system of Bybit.

Investors can continue earning yield from the fund while using the shares as collateral. As part of its overall business, Franklin Templeton manages approximately $1.7 trillion in assets.

The tokened money market fund associated with the program currently has net assets of approximately $686 million. The structure provides trading liquidity for clients without having to sell fund holdings.

As reported earlier by CoinGape, the SEC’s Division of Investment Management issued a no-action letter on 12 August. The letter pertained to investing in a Franklin OnChain Money Fund that invests in U.S. Government Money Funds.

The SEC staff said it would not recommend enforcement action under the described arrangement, subject to stated conditions. This letter does not constitute official Commission approval.

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ByCustody Keeps Assets Outside the Exchange

ByCustody holds the tokenized fund shares instead of transferring them directly onto Bybit. The exchange reflects the value of the collateral on its platform.

This structure allows eligible investors to borrow stablecoins without selling their fund holdings. Clients can maintain exposure to the income from the underlying money market assets.

Bybit’s Global Head of RWA and TradFi, Yoyee Wang, noted that institutional investors are looking for more flexible options for their collateral. “It’s opening up the regulated investment product,” she said.

Franklin Templeton already has similar off-exchange collateral arrangements with Binance and OKX. The Bybit partnership brings on another crypto exchange to that network.

Meanwhile, Bybit has expanded its regulated presence in Europe. Bybit Payments GmbH acquired its Electronic Money Institution license from the Financial Market Authority (FMA) of Austria.

Partnership Expands Beyond Institutional Trading

Franklin Templeton has partnered with Bybit to offer tokenized money market fund access to eligible institutional clients. The product will be expected to function via Bybit and the Mantle network.

The offering will allow clients to gain access to certain Franklin Templeton investment strategies. Bybit and Mantle will provide more information individually.

The collaboration is a way to expand the Benji platform into a new digital marketplace, said Sandy Kaul, Head of Digital Assets and Innovation at Franklin Templeton.

The companies also intend to offer programmes on diversification, investment objectives and the traditional way of investing. The overall deal includes tokenized money, custody, and crypto trading facilities.

For more options, traders can explore the best platforms to trade tokenized stocks and compare access to blockchain-based versions of traditional equities.