In a move that could redefine how large financial institutions interact with digital assets, global asset management giant Franklin Templeton has joined forces with Binance to unveil a new system that lets investors trade crypto without ever moving their money onto an exchange.
The initiative—called the Institutional Off-Exchange Collateral Program—represents one of the clearest attempts yet to bridge the long-standing trust gap between traditional finance and cryptocurrency markets.
A New Model: Trade Crypto Without Sending Assets to an Exchange
For years, institutional investors faced a dilemma when entering crypto markets: to trade, they had to deposit assets directly onto exchanges, exposing themselves to risks ranging from cyberattacks to platform failures.
The new Franklin Templeton–Binance structure aims to eliminate that concern.
Under the program, hedge funds and asset managers can use tokenized shares of Franklin Templeton’s money market funds (MMFs) as collateral while the assets remain safely held in regulated third-party custody. Instead of transferring funds, Binance mirrors the collateral’s value inside its trading system, allowing institutions to execute trades across spot and derivatives markets.
The underlying assets never leave custody.
How the System Works Behind the Scenes
The tokenized fund shares are issued through Franklin Templeton’s Benji Technology Platform, a blockchain-based infrastructure designed to manage real-world assets in a compliant, transparent manner.
Custody is handled by Ceffu, Binance’s institutional-grade custody partner, which secures the assets using advanced safeguards such as multi-party computation. This architecture ensures:
Assets remain under regulated custody rather than exchange control
Institutions can post collateral without transferring ownership
Trading access remains fully functional on Binance’s platform
The result is a hybrid model combining blockchain settlement speed with the risk protections institutions demand.
Yield Continues—Even While Assets Are Used as Collateral
Unlike stablecoins or idle cash traditionally used for margin, the collateral consists of yield-bearing money market fund shares—short-term investments backed by government-related instruments.
That means participating institutions can continue earning interest on their assets while simultaneously deploying them for trading, dramatically improving capital efficiency.
Blockchain rails also enable 24/7 settlement, offering flexibility that conventional financial systems struggle to match.
Why This Matters for Institutional Crypto Adoption
The program directly addresses one of the biggest barriers preventing large-scale institutional participation in digital markets: counterparty risk.
Historically, institutions hesitated to engage deeply with crypto exchanges due to concerns about:
Asset custody and security
Regulatory oversight
Operational transparency
By keeping assets off-exchange while still enabling trading exposure, the new model reduces those concerns without sacrificing liquidity.
How It Differs From Other Tokenization Efforts
While the market for tokenized real-world assets (RWAs) has expanded rapidly, this initiative stands apart in several key ways:
Off-Exchange Safety
Unlike many crypto-native solutions, assets never leave regulated custody, minimizing exposure to exchange-specific risks.
Designed Specifically for Binance’s Ecosystem
Rather than operating purely on-chain like some tokenized funds, the structure integrates directly with Binance’s trading infrastructure.
Regulated Yield Instead of Price Stability
Where stablecoins focus on maintaining a dollar peg, Franklin Templeton’s MMFs generate regulated returns tied to traditional financial instruments.
Hybrid Approach vs. Pure DeFi
Fully decentralized lending platforms introduce smart contract and oracle risks. This program blends regulated fund structures with centralized execution to appeal to institutions wary of DeFi vulnerabilities.
Institutional Scale and Liquidity
Leveraging Franklin Templeton’s global asset base alongside Binance’s market depth offers a level of scale smaller tokenization projects have struggled to achieve.
A Signal of Finance’s Gradual Convergence
The launch marks the first tangible product from a strategic partnership announced in September 2025 and reflects a broader shift underway across global markets: the merging of traditional financial infrastructure with blockchain-based systems.
For crypto exchanges, the collaboration offers a pathway to attract cautious institutional capital. For asset managers, it provides access to digital markets without abandoning the safeguards of regulated finance.
The Bigger Picture: Tokenization Moves From Concept to Infrastructure
Tokenized real-world assets have long been touted as the next frontier in finance, but many initiatives remained experimental or niche. By pairing one of the world’s largest asset managers with one of crypto’s biggest trading platforms, this program pushes tokenization closer to mainstream financial plumbing.
If successful, it could serve as a blueprint for how trillions of dollars in traditional assets eventually interact with digital markets—securely, continuously, and without leaving regulated oversight.
In short, Wall Street isn’t just exploring crypto anymore.
It’s quietly rebuilding how the two systems connect.