Introduction
Franklin Templeton and Binance have unveiled an innovative institutional off-exchange collateral program that seeks to bridge the divide between traditional finance and the digital asset ecosystem. Unveiled as part of a collaborative initiative announced in 2025, this program allows qualifying institutions to utilize regulated, yield-generating money market fund shares as collateral for trading on Binance without actually transferring those assets onto the exchange.
Program Overview
By leveraging Franklin Templeton’s Benji Technology Platform, institutions can use tokenized money market fund shares as collateral while the actual assets remain securely held in regulated custody. This approach mirrors the value of these shares within Binance’s trading system, fundamentally shifting how institutions can engage with cryptocurrency markets.
Addressing Institutional Challenges
Historically, institutional investors have faced challenges when it comes to pledging collateral on crypto exchanges, mainly because yield-bearing assets would typically need to be moved on-exchange, increasing exposure to various risks such as counterparty, custody, and regulatory issues. The newly launched program solves this problem by allowing these assets to stay in custody while still being utilized for both spot and derivatives trades.
Benefits of the Program
According to the official announcement, this framework not only enables institutions to earn yields on traditional assets but also allows them to deploy these assets effectively within digital marketplaces. It enhances capital efficiency without compromising on regulatory compliance or custody security.
Roger Bayston, who leads Digital Assets at Franklin Templeton, emphasized the program’s goal of facilitating asset utilization in a regulated manner while enabling clients to earn substantial returns.
Partnership Insights
Catherine Chen, the Head of VIP & Institutional Business at Binance, expressed her enthusiasm about the partnership, noting that it aims to bring traditional financial tools onto blockchain platforms and highlight how technology can improve market efficiency and access for investors. The custody and settlement components of this initiative are managed by Ceffu, Binance’s dedicated institutional custody partner, which ensures regulated holding of the tokenized fund shares while they function as collateral.
Conclusion
This launch is emblematic of a larger shift towards integrating real-world assets into the digital finance realm. By permitting regulated money market funds to serve as collateral, the program aims to alleviate significant obstacles faced by institutional investors, potentially fostering increased participation in the digital finance sector.
