Franklin Templeton has expanded its tokenized collateral offering to cryptocurrency exchange Bybit, allowing traders to post the asset manager's tokenized money market fund shares as collateral for stablecoin trading credit while continuing to earn yield on the underlying assets.
How the Service Works
Under the arrangement, holders of Franklin Templeton's tokenized money market shares can pledge them as collateral to unlock trading credit lines denominated in USDT or USDC on Bybit. The key advantage is that the underlying assets keep generating yield even while they back a trader's positions, effectively letting capital do double duty.
The move reflects a growing trend in which traditional financial instruments are brought on-chain and repurposed for the crypto ecosystem. Tokenized money market funds have emerged as one of the more successful real-world asset categories, prized for their stability and income-generating qualities.
Traders can now put their tokenized fund shares to work as collateral while still collecting yield on the same assets.
A Deepening Tie Between TradFi and Crypto
Franklin Templeton has positioned itself as one of the more crypto-forward large asset managers, having launched tokenization initiatives and blockchain-based fund products ahead of many rivals. Extending its collateral service to a major exchange like Bybit broadens the reach of those offerings into active trading markets.
For Bybit, the integration adds an institutional-grade collateral option that could appeal to traders seeking capital efficiency. Using yield-bearing tokenized assets as collateral is increasingly seen as a competitive feature among exchanges courting professional and institutional participants.
Key aspects of the offering include:
- Tokenized money market shares serving as collateral for stablecoin credit lines
- Support for both USDT and USDC borrowing
- Continued yield generation on the pledged underlying assets
The partnership underscores how established financial firms and crypto trading platforms are increasingly weaving their products together, blurring the line between traditional asset management and digital-asset markets.