Franklin Templeton and Binance have agreed to an institutional collateral arrangement that allows eligible clients to post tokenized money market fund shares as off-exchange collateral, according to an announcement from the exchange on 11 Feb.
Binance Taps Franklin Templeton to Bring Tokenized Funds Into Trading Collateral
11 February 2026 - 12:43 CET
By Sandmark staff
The program enables institutional traders to use shares issued through Franklin Templeton’s Benji platform as collateral without transferring the underlying assets.
Instead, the tokenized fund shares are held in third-party custody, with their collateral value reflected within Binance’s trading environment. Franklin Templeton is a major global investment firm, with nearly $1.7tn of assets under management, according to company statements this year.
Capital efficiency and counterparty risk
The arrangement allows clients to still earn yield on money market fund holdings while deploying them to support digital asset trading.
"Our off-exchange collateral program is just that: letting clients easily put their assets to work in third-party custody while safely earning yield in new ways," said Roger Bayston, head of digital assets at Franklin Templeton.
The structure targets a key institutional constraint in crypto markets: how to deploy capital efficiently without increasing exposure. Demand has risen for regulated, yield-bearing collateral that can function within 24-hour settlement cycles while meeting governance and risk standards. Tokenized money market funds are emerging as one way to bridge traditional asset management products and crypto trading infrastructure.
Catherine Chen, head of VIP and institutional at Binance, said the initiative reflects a broader effort to integrate established financial instruments into onchain market structures as exchanges compete to attract institutional capital.
Deepening TradFi and crypto integration
The initiative builds on a strategic relationship announced in 2025 and underscores growing convergence between asset managers and digital asset platforms. For Binance, the move expands its institutional service offerings. For Franklin Templeton, it extends the use of tokenized fund shares beyond passive holding into active trading collateral.
As tokenized real-world assets gain traction, arrangements such as this suggest a gradual shift toward hybrid market models that combine regulated custody with crypto-native liquidity.
