Binance and Franklin Templeton Enable Tokenized MMF Collateral 

What Led To Tokenized MMF collateral

The partnership traces back to a strategic agreement announced in September 2025, when Binance and Franklin Templeton set out to develop compliant digital asset solutions for institutional investors. Since then, institutional demand for safer crypto market access has grown steadily.

Following past exchange failures, institutions have become more cautious about holding assets directly on trading platforms. Consequently, they have sought alternatives that preserve custody protections while still enabling active participation in crypto markets. Tokenized MMF collateral addresses this concern by allowing institutions to trade while keeping assets in regulated environments.

Tokenized real-world assets, especially money market funds, address this need. MMFs invest in low-risk, short-term instruments such as U.S. Treasuries and provide steady yield. When tokenized, these assets become programmable and interoperable with digital markets, allowing them to function as collateral without sacrificing compliance.

Similar initiatives have already gained traction. In November 2025, BlackRock’s BUIDL tokenized money market fund was accepted as collateral on platforms including Deribit, Crypto.com, and Binance. In parallel, JP Morgan advanced its Tokenized Collateral Network to explore blockchain-based collateral mobility in traditional markets.

Market response to these efforts was positive. BlackRock’s BUIDL surpassed $2.5 billion in assets under management, reflecting strong institutional demand for yield-bearing, tokenized collateral and reinforcing confidence in RWA tokenization.

How the Tokenized MMF collateral Works

Under the new arrangement, institutional clients pledge tokenized MMF shares issued through the Benji platform. These assets remain in regulated custody with Ceffu rather than sitting on Binance.

Meanwhile, Binance mirrors the collateral value within its trading environment. This mechanism allows institutions to open and maintain positions without transferring the underlying assets. Importantly, the MMF tokens continue to earn yield while serving as collateral.

This off-exchange model reduces custody risk, minimizes operational friction, and prevents capital from remaining idle. At the same time, it aligns with institutional risk management standards and regulatory expectations.

Implications for Institutional Trading

This collaboration represents a meaningful step toward deeper institutional adoption of crypto markets. By combining TradFi-grade assets with crypto trading infrastructure, the program lowers barriers for hedge funds, asset managers, and other large participants.

Binance executive Catherine Chen described the initiative as a natural extension of the firm’s efforts to connect traditional finance with digital assets. Similarly, Franklin Templeton’s Roger Bayston emphasized that the partnership focuses on making digital finance functional for institutions.

Looking ahead, the program could accelerate the growth of tokenized real-world assets and encourage more asset managers to tokenize liquidity products. Over time, such models may strengthen market resilience, improve capital efficiency, and further integrate traditional capital markets with blockchain-based systems.