Global investment manager Franklin Templeton has launched an institutional collateral program with Binance. The initiative allows clients to use tokenized money market fund shares as trading collateral while the underlying assets remain in regulated, off-exchange custody. According to a company news release, the model is designed to reduce counterparty risk and let institutions earn yield on regulated holdings while supporting digital asset trading.
Global investment manager Franklin Templeton announced an institutional off-exchange collateral program with Binance. The program lets clients use tokenized money market fund shares to back trading activity while the underlying assets stay in regulated custody. The framework aims to reduce counterparty risk by reflecting collateral balances inside Binance’s trading environment without moving client assets onto the exchange.
Eligible institutions can pledge tokenized MMF shares issued via Franklin Templeton’s Benji Technology Platform as collateral for trading on Binance. These tokenized fund shares are held off-exchange by Ceffu Custody, a digital asset custodian licensed in Dubai. Their collateral value is mirrored on Binance to support trading positions.
Franklin Templeton said the model allows institutions to earn yield on regulated money market fund holdings while using the same assets for digital asset trading. Clients do not give up existing custody or regulatory protections. “Our off‑exchange collateral program is just that: letting clients easily put their assets to work in regulated custody while safely earning yield in new ways,” said Roger Bayston, head of digital assets at Franklin Templeton.
The initiative builds on a strategic collaboration between Binance and Franklin Templeton announced in 2025. The partnership aims to develop tokenization products that combine regulated fund structures with global trading infrastructure.
The design mirrors other tokenized real‑world asset collateral models in crypto markets. BlackRock’s BUIDL tokenized US Treasury fund, for example, is also accepted as trading collateral on Binance and other platforms. This allows institutional clients to post a low-volatility, yield‑bearing instrument instead of idle stablecoins or more volatile tokens.
Other issuers and venues, including WisdomTree’s WTGXX and Ondo’s OUSG, are exploring similar models. Tokenized bond and short‑term credit funds are increasingly positioned as onchain collateral in both centralized and decentralized markets.
Despite this trend, global regulators have warned that cross‑border tokenization structures can introduce new risks. The International Organization of Securities Commissions (IOSCO) has cautioned that tokenized instruments used across multiple jurisdictions may exploit regulatory differences. They warn this can enable regulatory arbitrage if oversight and supervisory cooperation do not keep pace.
