Binance said it is collaborating with Franklin Templeton on a collateral program for tokenized funds. The solution will solve the problem of how to deploy capital on exchanges without leaving the assets idle on the trading platform.
Binance and Franklin Templeton Bring Tokenized Fund Collateral to Institutions
The exchange announced in a new blog post that they are entering into a partnership to launch an institutional collateral program. This will enable the use of tokenized money market fund (MMF) shares issued via Franklin Templeton’s Benji Technology Platform for collateral on the exchange.
Instead of actually moving the funds or cryptocurrency to the exchange, the client agrees to tokenized fund shares managed by the custodian. This allows the exchange to mirror the value of the assets on their system. Hence, the client can trade while still maintaining the position outside of Binance.
This partnership occurs after Franklin Templeton launched its tokenized platform onto the BNB chain last year. This was one of the integration steps following its announcement of a partnership with the platform.
The new system seeks to avoid risks associated with counterparties as experienced through the exchange failures and custody issues over the years, which usually made some of these institutions wary and hesitant to keep large deposits with these exchanges.
Custody and settlement of the program will be done by Ceffu, the institutional custody partner of Binance. This means it holds tokenized fund shares in regulated custody and then provides access to such as trading collateral.
Tokenization Push Continues into Crypto Industry
Recently, there has been a shift from institutions and regulators to the tokenization sector. Such is the development in the space that even last week, the U.S CFTC included other assets such as stablecoins on its list of eligible tokenized collateral, due to the growing demand for such coins in the tokenization space.
In addition to this, the NYSE announced that it is planning to launch its own trading and on-chain settlement platform for tokenized securities. This could be extremely bullish for crypto and its exchanges, according to Binance’s CZ.
Meanwhile, last December, the SEC sped up the proceedings to allow tokenized securities to trade on the Nasdaq exchange. This underscores the increased need for these offerings in the markets.
Source: https://coingape.com/binance-franklin-templeton-launch-tokenized-fund-collateral-for-institutions/

