Franklin Templeton and Bybit will let institutions use tokenized shares from a roughly $686M fund as off-exchange collateral for Tether (USDT) or USD Coin (USDC) credit while retaining yield.
Key Points:
- Franklin Templeton and Bybit are linking tokenized money market fund shares to Bybit trading credit without moving the underlying assets onto the exchange.
- The program is limited to eligible clients.
- Investors can keep earning fund yield while accessing USDT or USDC credit lines for trading through ByCustody.
USDT USDC Collateral
Franklin Templeton and Bybit announced the partnership on Sept. 28, giving qualified institutional investors a new way to pledge shares issued through Franklin Templeton’s Benji Technology Platform. The shares remain with ByCustody, while Bybit mirrors their collateral value inside its trading environment and can extend USDT or USDC credit lines. The assets stay off the exchange.
The linked Franklin OnChain U.S. Government Money Fund has about $686 million in net assets, giving the program a regulated, yield-bearing asset that can support trading activity. Clients can keep the fund’s income stream.
The structure gives investors trading liquidity without requiring them to sell the fund position, while separating custody of the underlying shares from activity on Bybit. Bybit recognizes the pledged value inside its platform, allowing the collateral to support stablecoin credit even though the tokenized shares remain elsewhere. That separation is central to the arrangement.
The SEC issued Franklin Templeton a no-action letter on Aug. 12 under stated custody conditions, not formal Commission approval.
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Yoyee Wang View
Bybit Global Head of RWA and TradFi Yoyee Wang said institutional investors are looking for more flexible collateral options as tokenized assets become more useful in trading infrastructure. “It’s opening up the regulated investment product,” Wang said. The partnership gives those investors another way to use a regulated, yield-bearing product without first moving the underlying asset onto a crypto exchange.
Franklin Templeton digital assets and innovation head Sandy Kaul said the collaboration extends the Benji platform into another digital marketplace, while Bybit and Mantle plan additional products for wallet-based investors.
The Bybit program follows earlier Franklin Templeton tokenized-collateral work, including an OKX arrangement with Standard Chartered and a Binance program announced in February 2026, extending a model built around keeping yield-bearing assets outside exchanges.
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