Paul Johnson Franklin Templeton partners with Binance to allow institutions to use tokenized money market funds as off exchange collateral, reshaping how digital asset trading integrates with regulated finance.
Franklin Templeton and Binance bring tokenized MMFs into the trading arena
Global investment powerhouse Franklin Templeton has unveiled a groundbreaking collaboration with Binance that allows institutions to use tokenized money market funds as off exchange collateral. This innovative arrangement is designed to bring institutional scale finance and digital asset trading closer together while maintaining the security of regulated custody.
Under the new setup, institutional traders can pledge tokenized money market fund shares through Franklin Templeton’s Benji Technology Platform to support their positions on Binance. These tokenized assets are securely stored with Ceffu Custody, a regulated entity in Dubai, ensuring that underlying holdings never leave trusted oversight. Instead, the collateral value is reflected directly inside Binance’s trading environment, allowing seamless trading activity without shifting the original fund assets.
This marks another step forward in the convergence of traditional financial structures and blockchain based infrastructure, as more institutions explore real world asset tokenization for capital efficiency and reduced counterparty risk.
A new model for institutional trading safety
The collaboration is positioned as a response to long standing concerns about counterparty exposure in digital asset markets. Franklin Templeton’s tokenized money market funds allow participants to maintain regulatory protections and yield generation, even as their tokenized shares power trading activity.
Roger Bayston, head of digital assets at Franklin Templeton, emphasized that the new model aims to help clients make their capital more productive while keeping it under regulated custody. The system effectively bridges secure fund management with high frequency trading by mirroring the collateral value on Binance, eliminating the need for risky asset transfers.
By using tokenized MMFs as off exchange collateral, institutions can replace stablecoins or volatile crypto assets with low risk, yield bearing instruments. This adds a layer of financial sophistication that brings crypto trading closer to institutional standards found in traditional markets.
Binance expands its institutional infrastructure
For Binance, the integration of tokenized money market funds marks another milestone in its effort to enhance institutional participation. The exchange has already accepted tokenized real world asset funds like BlackRock’s BUIDL as collateral, enabling traders to deploy low volatility instruments in place of stablecoins.
Now, with Franklin Templeton joining the mix, Binance deepens its ecosystem of regulated collateral options. Ceffu’s role as the custody provider ensures transparency and compliance, supporting the global exchange’s strategy to strengthen trust among financial institutions and asset managers.
This collaboration traces back to a strategic initiative launched in 2025, aimed at combining the expertise of Franklin Templeton’s regulated fund management with Binance’s global trading infrastructure. The latest move showcases the practical realization of that vision, offering a model that other asset managers may soon follow.
The rise of tokenized MMFs in digital finance
Tokenized money market funds have become one of the fastest growing use cases in real world asset tokenization. Beyond Franklin Templeton, several major issuers and platforms have embraced similar models. BlackRock’s BUIDL token, issued by Securitize, is already in use on Binance, Crypto.com, and Deribit as eligible collateral. WisdomTree’s WTGXX and Ondo Finance’s OUSG tokens are also being positioned as yield generating, low volatility instruments for both centralized and decentralized finance venues.
The advantage of tokenized MMFs lies in their dual utility: they retain traditional regulatory backing and yield performance while becoming programmable assets that can seamlessly integrate with blockchain based trading systems. For institutional players, this means access to liquidity and capital efficiency without sacrificing compliance or asset safety.
Regulatory watch: balancing innovation and oversight
Despite the growing interest in tokenized MMFs, global regulators remain cautious. The International Organization of Securities Commissions (IOSCO) has warned that tokenization across jurisdictions may introduce complex risks, especially when different national regimes interact without unified supervision.
Concerns about regulatory arbitrage, custody standards, and cross border settlement have prompted calls for greater collaboration between financial authorities. Still, as institutions like Franklin Templeton demonstrate transparent and regulated tokenization models, the perception of digital assets in traditional finance continues to evolve.
The future of off exchange collateralization
The Franklin Templeton and Binance initiative signals a broader transformation in how collateral is managed in digital markets. By keeping tokenized MMFs in regulated custody and mirroring their value on exchange, the model effectively reduces counterparty exposure while unlocking new capital efficiency tools for institutions.
This hybrid structure merging the stability of traditional funds with the flexibility of blockchain may soon become the blueprint for future institutional crypto infrastructure. As the line between traditional and decentralized finance continues to blur, tokenized MMFs could become the cornerstone of a safer, yield enhanced trading ecosystem.
Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards.
