Bybit has begun accepting Franklin Templeton's Benji tokenized money-market fund shares as collateral for stablecoin credit lines, according to product disclosures reviewed this week.

The terms state that "eligible clients can pledge Benji-issued money market fund shares for USDT or USDC credit lines" while the shares "stay in custody and keep paying yield." The arrangement effectively lets traders draw stablecoin liquidity against an asset that continues to accrue fund distributions.

The structure replicates a template Franklin Templeton first deployed with Binance in February, when the asset manager first wired the same tokenized product into live trading collateral at a major centralized venue.

What is Benji?

Benji is the onchain wrapper for shares in a Franklin Templeton U.S. money-market fund, a vehicle holding short-duration Treasuries and cash equivalents. Each token represents a proportional claim on the underlying portfolio and tracks the fund's net asset value.

The token has circulated on public blockchains for institutional settlement and corporate treasury applications. Its new role at Bybit marks the first time the asset functions as live exchange collateral against stablecoin loans on that venue.

How does the collateral mechanic work?

Clients move Benji tokens into a designated custody account at the exchange. The platform extends a credit line denominated in USDT or USDC, sized to a haircut applied to the fund's net asset value.

Tokenized shares keep accruing yield throughout the loan. Borrowers effectively take stablecoin loans against an asset that pays interest — a configuration rarely available on centralized crypto venues before tokenized Treasuries matured.

Where does Bybit draw eligibility lines?

Bybit describes the product as available to "eligible clients" and routes prospective borrowers through KYC and derivatives-onboarding checks before collateral functionality activates in their accounts.

The exchange has not publicly listed every excluded jurisdiction. Centralized venues typically restrict lending collateral offerings to users outside markets such as the United States and United Kingdom, though the specific carve-outs for the Benji line remain undisclosed in the materials reviewed.

Why does the structure matter?

Tokenized money-market funds have circulated onchain for months, but their deployment as live exchange collateral has remained limited. Each new venue signing the same template moves the asset class closer to operating as a substitute for stablecoin reserves inside centralized books.

For Franklin Templeton, the deal broadens the distribution footprint of the tokenized fund beyond wallet holders to the leveraged-trading user base of two of the largest centralized exchanges by volume. For Bybit, the addition widens a collateral roster already spanning tokenized Treasuries and equity wrappers.

What to watch next?

The next milestone is whether Franklin signs a third major venue, extending the collateral pattern beyond Bybit and Binance. The asset manager has not named additional counterparties publicly.

Separately, the haircut ratio assigned to Benji collateral will determine whether the product competes with stablecoin-denominated margin or remains a niche institutional feature. Bybit has not disclosed that figure.