Franklin Templeton has expanded the reach of its tokenized money market infrastructure by bringing its Benji-issued fund shares to Bybit. The arrangement allows eligible institutional clients to post shares of the Franklin OnChain U.S. Government Money Fund as off-exchange collateral while obtaining USDT or USDC trading credit lines on the exchange.
The setup is designed so the underlying assets stay in off-exchange custody while their value is mirrored inside a client’s Bybit trading environment. That structure means clients can use the collateral for trading activity without moving the assets onto the exchange, while continuing to receive the fund’s yield.
How the collateral arrangement works
Under the new integration, institutional users that qualify can use BENJI-linked fund shares as collateral rather than transferring the underlying tokenized assets onto Bybit itself. Bybit then recognizes a mirrored value for those holdings inside the trading account environment.
The collateral can be used to support credit lines denominated in USDT or USDC. At the same time, the underlying assets remain held off-exchange, a structure presented as allowing investors to keep earning the money market fund’s yield while also deploying the position for trading-related purposes.
Fund size and token structure
The product at the center of the arrangement is the Franklin OnChain U.S. Government Money Fund, also known as FOBXX. As of Aug. 31, the fund held about $686.64 million in net assets, according to the source report.
On Franklin Templeton’s blockchain-integrated recordkeeping platform, one share of the fund is represented by one BENJI token. That tokenized structure is what enables the shares to be used within the broader collateral framework now being extended to Bybit clients.
Bybit custody and broader partnership plans
For this deployment, Bybit said the assets are held through ByCustody, its off-exchange custody service, while the exchange reflects their value for trading purposes. The arrangement follows the same basic model described in Franklin Templeton’s other off-exchange Benji collateral integrations.
The two companies also plan to introduce a wallet-based tokenized wealth product on the Mantle blockchain. No launch date or additional product details were announced in the source material.
What comes next
Franklin Templeton has already rolled out similar Benji-based off-exchange collateral arrangements with Binance and other platforms, indicating that the Bybit expansion is part of a wider distribution strategy for its tokenized fund infrastructure.
The next confirmed development is the planned Mantle-based wealth product, although timing remains unclear. For now, the announced change is the availability of BENJI-backed collateral use on Bybit for eligible institutional clients under the off-exchange custody model.
Source: crypto.news