Franklin Templeton has introduced a new institutional program with Binance that allows clients to use tokenized money market fund (MMF) shares as off-exchange collateral for trading. The initiative enables institutions to keep their fund assets in regulated custody while still using them to support digital asset trading on Binance.
Under the framework, eligible institutions can pledge tokenized MMF shares issued through Franklin Templeton’s Benji Technology Platform. Instead of transferring assets directly onto the crypto exchange, the tokenized fund shares are held off-exchange by Ceffu Custody, a Dubai-licensed digital asset custodian. Their collateral value is then mirrored within Binance’s trading system to back positions.
This structure is designed to reduce counterparty risk. By keeping the underlying assets in regulated custody rather than on the exchange itself, institutions maintain greater control and regulatory protections while actively trading digital assets.
Franklin Templeton says the model also allows clients to continue earning yield on their money market fund holdings. Traditionally, traders often park capital in stablecoins or other idle assets when posting collateral. With this setup, institutions can use a low-volatility, yield-bearing instrument instead.
Roger Bayston, head of digital assets at Franklin Templeton, described the initiative as a way for clients to put assets to work while maintaining regulated custody and earning yield through new channels.
The program builds on a broader strategic collaboration between Binance and Franklin Templeton announced in 2025. The partnership focuses on developing tokenization solutions that combine traditional regulated fund structures with global crypto trading infrastructure.
Growing Use of Tokenized Funds as Crypto Trading Collateral
Franklin Templeton’s move reflects a broader trend in the crypto industry: using tokenized real-world assets (RWAs) as trading collateral.
BlackRock’s BUIDL tokenized U.S. Treasury fund, issued by Securitize, is already accepted as collateral on Binance and other platforms such as Crypto.com and Deribit. This model gives institutional traders the option to post relatively stable, income-generating instruments instead of more volatile cryptocurrencies.
Other asset managers and platforms are exploring similar approaches. WisdomTree’s WTGXX and Ondo’s OUSG are among the tokenized bond and short-term credit funds being positioned for use as onchain collateral in both centralized and decentralized markets.
However, the growing adoption of tokenized MMFs and other RWAs has also drawn attention from regulators. The International Organization of Securities Commissions (IOSCO) has warned that cross-border tokenization structures may introduce new risks. In particular, regulators are concerned that differences between national regulatory regimes could lead to gaps in oversight or regulatory arbitrage if supervision does not keep pace with innovation.
