Bybit and Franklin Templeton announced a strategic collaboration on September 28, 2026 to expand access to tokenized investment products, beginning with an institutional program letting eligible clients use tokenized money market fund shares as off-exchange collateral for trading.
Eligible investors can pledge fund shares issued through Franklin Templeton’s Benji Technology Platform through ByCustody and obtain USDT or USDC trading credit on Bybit while the underlying tokenized assets remain in off-exchange custody, according to Bybit’s announcement.
Franklin Templeton manages approximately $1.7 trillion in assets, while Bybit, the world’s second-largest exchange by trading volume, says it has more than 80 million users worldwide.
Sandy Kaul, Head of Digital Assets and Innovation at Franklin Templeton, said tokenization continues to reshape finance, and extending Benji connectivity to Bybit offers institutions a trusted venue to put regulated, yield-bearing assets to work in digital markets. The companies also plan to extend the collaboration to wallet-based investors through a tokenized wealth product on Bybit and the Mantle chain.
Franklin Templeton Digital Assets highlighted the institutional application in its X post:
What the Institutional Collateral Program Does
The first initiative focuses on institutional investors. Eligible clients can pledge tokenized fund shares through ByCustody, with underlying assets remaining in off-exchange custody while their value is mirrored in Bybit’s trading environment, allowing access to trading credit without transferring the tokenized assets onto the exchange, a structure comparable to the collateral models covered in 9 best crypto lending platforms in 2026.
| Partnership Component | Role |
| Franklin Templeton | Tokenized investment infrastructure |
| Benji | Blockchain-integrated fund platform |
| ByCustody | Off-exchange custody |
| Bybit | Trading and credit access |
Table 1. Main components of the Bybit-Franklin Templeton institutional program.
The companies have not disclosed specific credit limits, collateral haircuts, or expected program size. Bybit is not the first exchange to offer this structure: Franklin Templeton launched a similar arrangement with Binance that went live February 11, 2026, making Bybit the second major exchange to accept BENJI tokens as collateral.
The Underlying Fund Has Been Onchain Since 2021
A key detail is that Franklin Templeton’s tokenized fund infrastructure is not a new experiment. The Franklin OnChain U.S. Government Money Fund (FOBXX) launched April 6, 2021, described as the first U.S.-registered mutual fund to use a public blockchain for transactions and ownership records. One FOBXX share is represented by one BENJI token, with the transfer agent maintaining the official ownership record through Benji.
| BENJI / FOBXX | Latest Detail |
| Fund inception | April 6, 2021 |
| Net assets, Aug. 31, 2026 | $686.64M |
| Net expense ratio | 0.20% |
| Dividend frequency | Daily |
Table 2. Current operating data for Franklin Templeton’s tokenized money market fund.
Franklin Templeton’s broader tokenized offerings have now crossed $2 billion in AUM. 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, opening another use case for the tokenized fund inside conventional registered investment products.
Why Tokenization Doesn’t Change the Underlying Investment
The BENJI token represents a share of the Franklin OnChain U.S. Government Money Fund, which invests primarily in U.S. government securities, cash, and fully collateralized repurchase agreements.
The underlying investment remains a regulated money market fund, meaning Bybit isn’t treating a newly created cryptocurrency as collateral but a tokenized representation of an established fund.
Benji currently runs on multiple blockchains, including Stellar, Ethereum-compatible infrastructure, Polygon, Base, Aptos, Solana, and Arbitrum, with different minimum investments depending on the network, a multi-chain approach relevant to the broader institutional momentum in how BlackRock’s Bitcoin ETF is changing institutional demand.
A Second Track Targets Wallet-Based Investors
The collaboration extends beyond institutional collateral. Bybit and Franklin Templeton said they will develop a tokenized wealth product on Bybit and Mantle providing wallet-based investors access to Franklin Templeton investment strategies, alongside education initiatives on goals-based investing and diversification.
No launch date, product composition, or eligibility rules have been provided, with further details expected separately from Bybit and Mantle.
What Comes Next for the Collaboration
The institutional collateral program is the first initiative under the new Bybit-Franklin Templeton collaboration. The companies have not disclosed the amount of collateral expected to be placed through the program, the number of participating institutions, or the specific credit parameters available to eligible clients, and the planned wallet-based tokenized wealth product also remains under development.
What this means for you: The Bybit-Franklin Templeton collaboration connects an established tokenized U.S. government money market fund with institutional crypto trading infrastructure.
Eligible clients can use the tokenized fund shares as off-exchange collateral while the assets remain in custody, creating a link between traditional investment products and digital-asset trading liquidity. A separate initiative is expected to bring Franklin Templeton investment strategies to wallet-based investors.
This article is for informational purposes only and does not constitute financial or investment advice. Tokenized investment products, money market funds, digital assets, and collateralized trading involve market, liquidity, custody, counterparty, regulatory, and operational risks. Eligibility and availability may vary by jurisdiction and investor type.
