Franklin Templeton and Binance have launched a new institutional off-exchange collateral program that aims to weave traditional finance into the fabric of digital markets.
- Franklin Templeton and Binance are deepening their collaboration by allowing institutional investors to use tokenized money market fund shares as off-exchange collateral for crypto trading.
- The structure keeps assets in regulated custody, reducing counterparty risk while allowing institutions to deploy yield-bearing TradFi assets within digital markets.
- The move highlights growing convergence between traditional finance and crypto, as real-world assets are increasingly tokenized and integrated into on-chain trading infrastructure.
Franklin Templeton, Binance bridge TradFi and crypto
This initiative enables eligible institutions to use regulated, yield-bearing money market fund shares as collateral for trading on Binance without ever moving those assets onto an exchange.
The program goes live as part of a broader collaboration announced in 2025 between the global asset manager and the world’s largest cryptocurrency exchange. It lets institutions pledge tokenized money market fund shares issued through Franklin Templeton’s Benji Technology Platform as collateral.
The actual assets remain held in regulated custody while their value is mirrored inside Binance’s trading environment.
Reducing barriers to crypto markets
For institutional investors, posting collateral on a crypto exchange has long posed a dilemma: yield-bearing assets must be moved on-exchange — exposing capital to counterparty, custody, and regulatory risk. The new program resolves this by keeping underlying shares off-exchange in regulated custody while still enabling their use for spot and derivatives trading.
According to the press release, this structure allows institutions to earn yield on traditional assets while actively deploying them in digital markets, enhancing capital efficiency without sacrificing regulatory protections or custody safeguards. Roger Bayston, Head of Digital Assets at Franklin Templeton, described the initiative as “letting clients easily put their assets to work in regulated custody while safely earning yield in new ways.”
Binance’s Head of VIP & Institutional Business, Catherine Chen, said the partnership will help bring traditional financial instruments on-chain, demonstrating how blockchain technology can enhance market efficiency and investor access.
Custody and settlement infrastructure for the program is provided by Ceffu, Binance’s institutional custody partner, which holds the tokenized fund shares in regulated accounts while facilitating their use as collateral.
The launch reflects a broader trend of real-world assets integrating into digital markets. By allowing regulated money market funds to act as collateral, the program addresses a significant institutional pain point and may encourage deeper institutional participation in digital finance.
