Franklin Templeton and Binance Unveil Tokenized Money‑Market Collateral Solution
Institutional investors can now pledge tokenised shares of Franklin Templeton’s money‑market funds as off‑exchange collateral on Binance, with the assets held in regulated custody and mirrored within the exchange’s trading engine.
Overview
Asset manager Franklin Templeton, which oversees roughly US$1.6 trillion in assets, and Binance, the world’s busiest crypto exchange by daily volume, announced a partnership that enables eligible institutional clients to use tokenised money‑market fund (MMF) shares as collateral for margin and derivatives trading on Binance. The tokenised fund shares are issued through Franklin Templeton’s proprietary blockchain solution, the Benji Technology Platform, and are custodied by Ceffu, Binance’s institutional‑custody partner.
How the Program Works
- Tokenisation – Franklin Templeton tokenises shares of its MMFs on the Benji platform, which already supports multiple public blockchains, including Ethereum, Arbitrum, Solana, Stellar, and BNB Chain.
- Off‑Exchange Collateral – Institutional clients can lock these tokenised shares as collateral without moving the underlying cash or securities onto Binance’s order books. The assets remain in a regulated custodial environment while a one‑to‑one value representation is mirrored inside Binance’s margin engine.
- Custody & Settlement – Ceffu provides the custodial and settlement infrastructure, ensuring that the tokenised holdings stay compliant with existing financial‑services regulations.
- Yield Continuity – Because the underlying MMFs continue to generate yield, investors can retain earnings on the same assets that serve as collateral, addressing the “dead‑cash” problem that often accompanies traditional margin postings.
Strategic Rationale
The collaboration reflects a broader industry push to bring conventional, regulated financial products onto blockchain‑based platforms. By allowing institutions to retain the regulatory safeguards of traditional custody while gaining the operational efficiency of on‑chain tokenisation, the program aims to:
- Reduce Counterparty Risk – Assets never leave the custodial environment, limiting exposure to exchange‑side failures.
- Enhance Capital Efficiency – Tokenised collateral can be redeployed across multiple trading strategies without liquidating the underlying positions.
- Bridge the Yield Gap – Institutions can keep earning the low‑risk returns associated with MMFs while participating in the higher‑velocity crypto markets.
“Since our partnership began, our focus has been on translating digital‑finance concepts into practical tools for institutional clients,” said Roger Bayston, head of digital assets at Franklin Templeton. “This collateral offering lets clients keep assets in a regulated vault, yet still tap into yield‑generating opportunities—a core promise of the Benji platform.”
Market Context
Franklin Templeton has been steadily expanding its blockchain footprint. Earlier this year, the firm refreshed two institutional MMFs to accommodate stable‑coin reserves and facilitate blockchain‑based distribution. In September 2025, Benji was launched on BNB Chain, adding to its existing deployments on Ethereum‑compatible networks, Solana, and Stellar.
For Binance, the move reinforces its strategy of courting institutional liquidity by integrating compliant, regulated financial products into its ecosystem. The announcement came at a time when Binance’s native token, BNB, was marginally softer—down about 2.5% on the day and trading near $622, according to market data from CoinGecko.
Analysis
The tokenised collateral model could serve as a template for other asset managers seeking to monetize existing fund structures within the crypto space. By sidestepping the need to physically transfer securities onto an exchange, the solution mitigates operational frictions that have traditionally limited institutional participation in crypto derivatives. Moreover, the use of a regulated custodian aligns the offering with U.S. securities law, potentially easing compliance concerns for asset‑allocation teams.
However, adoption will depend on the robustness of the underlying legal framework governing tokenised securities, the ease of integration with existing treasury‑management systems, and the perceived reliability of the custody provider. Market participants will also watch how the mirrored‑value mechanism performs under stressed conditions, such as rapid price swings or network congestion.
Key Takeaways
- Tokenised MMFs as Collateral – Franklin Templeton’s Benji platform now issues tokenised shares of its money‑market funds that can be pledged on Binance without leaving regulated custody.
- Regulated Custody via Ceffu – The assets stay off‑exchange, with custody and settlement handled by Binance’s institutional partner, preserving compliance.
- Yield Retention – Clients continue to earn on the underlying MMFs while using the same assets for margin or futures trading.
- Cross‑Chain Reach – Benji’s deployment across Ethereum, Arbitrum, Solana, Stellar, and BNB Chain broadens the pool of eligible investors.
- Institutional Risk Management – The structure aims to lower counter‑party risk and improve capital efficiency for institutional traders entering crypto markets.
The Franklin Templeton‑Binance collaboration marks a notable step toward the convergence of traditional asset‑management practices and decentralized finance infrastructure, signaling a maturing landscape where regulated financial products can seamlessly participate in on‑chain trading ecosystems.
Source: https://thedefiant.io/news/cefi/franklin-templeton-and-binance-launch-tokenized-collateral-program
