Global investment manager Franklin Templeton has launched an institutional off-exchange collateral program in collaboration with cryptocurrency exchange Binance. Announced on February 11, 2026, the initiative allows eligible institutions to use tokenized shares of money market funds (MMFs) as collateral for trading on Binance, while the underlying assets remain in regulated, off-exchange custody.
The framework is designed to reduce counterparty risk by reflecting collateral balances within Binance's trading environment without physically moving client assets onto the exchange. The tokenized MMF shares are issued via Franklin Templeton's Benji Technology Platform and are held by Ceffu Custody, a digital asset custodian licensed and supervised in Dubai. The collateral value of these shares is then mirrored on Binance to support trading positions.
Roger Bayston, Head of Digital Assets at Franklin Templeton, stated in the release, "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." The model enables institutions to earn yield on their regulated money market fund holdings while simultaneously using those same assets to back digital asset trading activities, without sacrificing existing custody or regulatory protections.
This program is the first major product stemming from a strategic collaboration between Binance and Franklin Templeton announced in 2025, aimed at developing tokenization products that merge regulated fund structures with global trading infrastructure. The initiative mirrors other tokenized real-world asset (RWA) collateral models emerging in crypto markets. For example, BlackRock's BUIDL tokenized US Treasury fund, issued by Securitize, is also accepted as trading collateral on Binance, as well as on other platforms like Crypto.com and Deribit.
The trend allows institutional clients to post low-volatility, yield-bearing instruments instead of idle stablecoins or more volatile tokens. Other issuers, including WisdomTree (WTGXX) and Ondo (OUSG), are exploring similar models, positioning tokenized bond and short-term credit funds as on-chain collateral in both centralized and decentralized markets.
Despite the growing adoption, global regulators have flagged potential risks. The International Organization of Securities Commissions (IOSCO) has cautioned that cross-border tokenization structures could exploit differences between national regulatory regimes and enable regulatory arbitrage if oversight and supervisory cooperation do not keep pace.
