A global investment manager and a major cryptocurrency exchange have launched a program allowing institutions to use tokenized money market funds as collateral for off-exchange trading.
Program bridges traditional finance and digital markets
Franklin Templeton and Binance announced the new institutional off-exchange collateral program, which went live this week. The initiative lets eligible clients use tokenized shares of money market funds—issued through Franklin Templeton’s Benji Technology Platform—as collateral when trading on Binance.
The arrangement addresses a persistent challenge for institutional traders: deploying traditional, regulated assets in digital markets without sacrificing yield or security. Instead of moving assets onto an exchange, the program mirrors the value of Benji-issued fund shares within Binance’s trading environment while keeping the underlying assets in regulated, off-exchange custody.
Roger Bayston, Head of Digital Assets at Franklin Templeton, said the partnership with Binance has focused on making digital finance functional for institutions. “Our off-exchange collateral program lets clients easily put their assets to work in regulated custody while safely earning yield in new ways,” he said. “That’s the future Benji was designed for, and working with partners like Binance allows us to deliver it at scale.”
Catherine Chen, Head of VIP & Institutional at Binance, called the program a natural step in bringing traditional finance and digital assets closer together. “Using traditional financial instruments on-chain creates new opportunities for investors and demonstrates how blockchain technology can improve market efficiency,” she said.
The program’s custody and settlement infrastructure is supported by Ceffu, Binance’s institutional crypto-native custody partner. Ian Loh, CEO of Ceffu, said institutions increasingly seek trading models that balance risk management with capital efficiency. “This program shows how off-exchange collateral can support institutional participation in digital markets while maintaining strong custody and control,” he said.
Tokenized assets remain in regulated custody
Under the program, tokenized money market fund shares are pledged as collateral for trading on Binance but stay held off-exchange in a regulated custody environment. This structure reduces counterparty risk, allowing institutions to earn yield on their assets while supporting trading activity without compromising custody, liquidity, or regulatory protections.
Related: Pope Leo XIV Supports Africa Investor’s Financial Vision
The initiative builds on a strategic collaboration between the two firms announced in September 2025. It also expands their networks of off-exchange program partners, reflecting growing demand for stable, yield-bearing collateral that can settle around the clock.
For Franklin Templeton, the program marks another step in adapting trusted investment products for modern markets. By using Benji to connect tokenized money market funds, the firm helps institutions trade, manage risk, and move capital more efficiently as digital finance becomes routine.
Binance has positioned itself as the largest regulated digital asset exchange. Adding tokenized real-world assets as collateral fits its broader effort to meet institutional demand for flexible, secure trading solutions.
The program’s long-term impact will depend on institutional adoption. The ability to use regulated, yield-bearing assets as collateral without sacrificing security or liquidity could change how institutional players engage with digital markets—but only if the infrastructure proves reliable at scale.
The partnership comes as traditional financial institutions explore blockchain-based solutions, though many remain cautious about custody risks and regulatory uncertainty. Such programs address those concerns by keeping assets in familiar, regulated structures while still offering the speed and efficiency of digital markets.
Whether institutions view it as a bridge to the future or another experiment in a fast-changing space may determine its success.
