- Tokenized MMF shares can now be used as off-exchange collateral for institutional trading on Binance with regulated custody.
- The program reduces counterparty risk while allowing institutions to earn yield on assets used for trading.
- TradFi and digital markets converge through tokenization and third-party custody infrastructure from Ceffu.
Binance and Franklin Templeton launched an off-exchange collateral program using tokenized money market fund shares. Institutions can now trade on Binance while keeping assets in regulated custody, earning yield, and enhancing capital efficiency without moving funds onto the exchange.
Institutional Trading Model with Tokenized Fund Shares
The Binance Franklin Templeton off-exchange collateral program allows institutions to trade without moving assets onto the exchange. Tokenized money market fund shares issued through Franklin Templeton’s Benji platform are mirrored within Binance’s trading system.
Ceffu provides custody and settlement services for the tokenized assets. The structure keeps the underlying fund shares off-exchange while still enabling their value to support active trading positions.
This design addresses operational and counterparty risk concerns. In a post shared on X, Catherine Chen, Head of VIP and Institutional at Binance.
She said the partnership brings traditional financial instruments into digital markets through on-chain innovation. She noted the program connects regulated assets with blockchain-based trading infrastructure.
Addressing Counterparty Risk and Capital Efficiency
Institutional traders have long faced limits when deploying capital on crypto exchanges. Assets often remained idle or exposed to exchange custody risks.
The new framework permits yield-bearing money market fund shares to function as collateral without leaving regulated custody.
Roger Bayston, Head of Digital Assets at Franklin Templeton, explained that the program allows clients to put assets to work while maintaining third-party custody protections. He described the initiative as a practical step for institutional digital finance adoption.
By using tokenized fund shares, institutions can earn yield and trade simultaneously. The arrangement supports governance and compliance standards already used in traditional finance.
It also aligns with the need for round-the-clock settlement cycles.
Tokenization Trend and Market Infrastructure
The Binance Franklin Templeton off-exchange collateral program reflects a wider shift toward tokenized real-world assets in financial markets. Regulators and exchanges are increasingly exploring blockchain-based settlement for traditional securities and collateral instruments.
Ceffu’s CEO, Ian Loh, stated on social media that institutions now seek trading models focused on risk management without losing capital efficiency. His remarks frame tokenized collateral as a response to lessons learned from past exchange failures.
Tokenized money market funds represent one category of traditional products adapted for digital environments. Their integration into exchange trading systems supports secure access to liquidity and modern custody structures.
The approach connects institutional standards with blockchain-based execution. The Binance Franklin Templeton program positions a bridge between regulated finance and digital asset markets.
Institutions can trade on Binance while maintaining custody of assets through third-party infrastructure.
Demand continues to rise for stable and yield-bearing collateral that operates across time zones and market hours. Tokenization offers a way to adapt conventional financial products to this requirement without changing their core regulatory status.
Through this, Binance will expand its institutional offering while Franklin Templeton advances the use of its Benji platform in digital trading environments. The program adds another layer of integration between traditional asset management and blockchain-based market systems.