Franklin Templeton Expands Collateral Program to Bybit

Franklin Templeton, a US-based asset manager, has extended its institutional collateral program to the crypto exchange Bybit.

The partnership allows Bybit users to pledge shares of Franklin Templeton's tokenized money market funds to borrow USDT or USDC stablecoins for trading. The underlying assets remain with the custody platform ByCustody, mitigating the need to transfer them directly to the exchange.

Franklin Templeton stated that the pledged shares represent approximately $686 million in net asset value. This setup facilitates trading without the actual holdings being moved onto the exchange's wallet, a feature often promoted for reducing counterparty risk.

The company already offers similar arrangements with crypto exchanges Binance and OKX. The use of tokenized Treasury products as collateral for crypto trades is increasing, with a market value now exceeding $14.6 billion.

Details regarding ByCustody's regulatory status or its corporate relationship with Bybit were not publicly clarified, although Bybit has obtained provisional approval from Dubai's Virtual Assets Regulatory Authority.