Institutions can use tokenized money market funds as off-exchange collateral while keeping assets in third-party custody.
Demand for yield-bearing collateral in crypto trading is increasing. Binance and Franklin Templeton have introduced an off-exchange program linked to tokenized money market funds. Eligible clients can trade on Binance while keeping their funds with a third-party custodian. This launch aims to foster closer ties between traditional finance and digital asset markets.
Tokenized MMF Now Accepted as Collateral on Binance
Binance and Franklin Templeton have introduced a tokenized money market fund collateral program for large-scale trading. The initiative will allow eligible traders to post tokenized fund shares as collateral while keeping assets off-exchange.
While the structure aims to improve capital efficiency, it will also reduce counterparty exposure. With the program, qualified Binance clients can use tokenized fund shares as collateral without moving assets onto an exchange.
Instead of holding funds directly on Binance, assets are held by a third-party custodian. Their value is reflected inside Binance’s system through Ceffu’s custody layer.
In the past, institutions often had to move assets onto exchanges, which increased counterparty and custody risk. The MMF collateral program reduces that exposure by keeping assets off-exchange. As a result, institutions can manage risk more carefully while maintaining trading flexibility.
Catherine Chen, Head of VIP & Institutional at Binance, said offering tokenized real-world assets as off-exchange collateral brings digital assets closer to traditional finance. She noted that placing traditional instruments on-chain creates new options for investors and makes trading more efficient.
Ian Loh, CEO of Ceffu, stated that institutions seek trading models that reduce risk while enabling efficient capital use. He added that more firms are looking for stable collateral that works with 24/7 markets and fits within their existing risk and compliance frameworks.
Franklin Templeton and Binance Expand Institutional Market Access
The partnership between Franklin Templeton and Binance began in 2025 with a shared goal to connect regulated financial products with digital trading markets. It set the stage for deeper cooperation between the two firms. Today’s tokenized collateral program grows directly from that earlier plan and marks their first product release together.
Franklin Templeton brings long-standing experience in managing regulated investment products and issuing tokenized securities. On the other hand, Binance contributes a large global trading platform with active institutional clients. Both sides are working to integrate familiar financial instruments into crypto trading systems in a structured manner.
Initial collaboration focused on building technical and regulatory alignment before launching products. Over time, both firms worked on custody structure, compliance standards, and trading integration.
“Since partnering in 2025, our work with Binance has focused on making digital finance actually work for institutions.”
Roger Bayston, Head of Digital Assets at Franklin Templeton, said.
The launch of the tokenized MMF collateral program shows those preparations have moved into execution. Programs like this suggest tokenized securities may play a larger role in collateral management going forward.
