Tokenized Money Market Funds Become Standard Collateral

Franklin Templeton is extending its BENJI tokenized off-exchange collateral program to Bybit, the third major crypto exchange to accept tokenized money market fund shares as trading collateral.

Andrea Mazáčová

Published: Sep 28, 2026 at 8:20 PM GMT+0000 | Read time: 2 min

Editorial illustration of a formal trading floor with a gold-railed walkway running from a row of vault doors toward a glass exchange atrium, suggesting collateral moving securely between custodian and exchange.

Tokenized money market funds are becoming standard collateral at major crypto exchanges

Franklin Templeton has added Bybit to the exchanges that accept its BENJI tokenized money market fund shares as off-exchange trading collateral, the third major venue in a rollout that already includes Binance and OKX. The arrangement, announced Monday, September 28, lets eligible traders pledge shares in the Franklin OnChain U.S. Government Money Fund, known as FOBXX, to borrow USDT or USDC while the underlying assets stay with a regulated custodian.

The pattern now runs across the industry. BlackRock’s BUIDL tokenized fund is accepted by Crypto.com and Deribit, where eligible institutional and professional users can back trades including derivatives positions. With Franklin Templeton live at three exchanges and BUIDL at two more, tokenized money market funds are turning into standard collateral infrastructure for institutional crypto trading rather than a one-off experiment.

The economics explain the pull. Pledged shares keep earning yield while they back trades, so collateral no longer sits idle. Benji paid a 3.7% annualized yield as of September 28, based on the latest seven-day rate. Under the Bybit arrangement, custody platform ByCustody holds the assets off-exchange with their value mirrored in Bybit’s trading environment, according to the announcement.

The firms involved give the trend its weight. Franklin Templeton, a 75-year-old asset manager with more than $1.5 trillion in traditional assets under management, has built the Benji platform to issue BENJI tokens one-to-one with FOBXX shares across blockchains including Stellar and Ethereum. Its tokenized offerings have reportedly crossed $2 billion in assets under management.

Regulation has kept pace. 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, clearing the legal path the exchanges are now building on.

A go-live date for the Bybit integration has not been announced.