Tokenized Collateral Expands Off-Exchange Access On Binance

Institutional traders are gaining a new way to manage risk as Binance and Franklin Templeton roll out tokenized collateral within a controlled, off-exchange environment.

Binance and Franklin Templeton introduce off-exchange collateral model

Binance has entered a new partnership with Franklin Templeton to tackle longstanding concerns in institutional crypto trading. The program lets large traders post tokenized money market fund shares as collateral, while their underlying assets remain held in regulated custody rather than on the exchange itself.

Under this structure, institutions can trade on Binance without transferring cash or securities directly onto the trading venue. Moreover, the setup is designed to reduce counterparty risk and custody concerns that have kept many firms wary of centralized platforms in recent years.

The initiative is positioned as a bridge between traditional finance and digital asset markets. That said, it also targets practical needs such as risk controls, balance sheet optimization, and operational efficiency for professional traders.

How tokenized shares work as collateral for crypto trading

The new program allows institutional clients to use tokenized shares of money market funds issued via Franklin Templeton’s Benji Technology Platform as collateral on Binance. These tokenized units represent claims on underlying fund shares, but the assets themselves stay off-exchange in a segregated custody setup.

The tokenized positions are pledged to Binance, while the actual securities and cash remain with a regulated custodian. However, within Binance’s trading environment, the tokenized value is mirrored and recognized as eligible margin, enabling clients to deploy capital without changing where their assets are held.

By avoiding direct transfers onto the exchange, trading firms can limit exposure to custody and liquidity risks. This approach makes it easier for institutional investors to access digital markets while still aligning with internal risk policies and governance rules.

Franklin Templeton’s Benji platform and secure capital deployment

Franklin Templeton delivers its role through the Benji platform, which tokenizes money market fund shares for use in trading and settlement workflows. These tokenized shares become an off-exchange collateral solution that aims to boost institutional capital efficiency on Binance.

Instead of parking large cash balances on the exchange, traders can continue to earn yield on their money market holdings while simultaneously using those holdings to support trading activity. Moreover, this dual use of assets is intended to optimize balance sheet deployment for sophisticated market participants.

The new design also seeks to strengthen security in institutional markets. Strategy’s collapse and other failures in the broader industry have increased scrutiny on centralized venues. In response, Binance is emphasizing structures that separate custody from trading and minimize direct asset exposure to the exchange itself.

Role of Ceffu and regulated institutional custody

Ceffu, described as Binance’s institutional custody partner, is responsible for holding the tokenized shares in a regulated environment. The custodian’s role is to ensure that the assets backing the tokens remain secure, segregated, and auditable while being referenced for trading on Binance.

With this framework, institutions can engage in crypto trading while retaining their assets under third-party, regulated watchdogs. That said, the arrangement aims to reassure compliance teams and regulators that operational risk and asset safety have been properly considered.

The presence of a dedicated institutional custody partner also reflects how centralized exchanges are adapting their models. Moreover, it underscores growing demand from professional traders for solutions that resemble traditional prime brokerage and collateral management services.

Impact on institutional crypto trading and market structure

The collaboration between Binance and Franklin Templeton highlights a broader push to integrate traditional, yield-bearing assets with digital asset venues. By bringing tokenized money market fund exposure into the trading stack, the initiative offers institutions a potentially safer and more efficient method to access crypto markets.

The use of tokenized collateral could help accelerate institutional crypto trading by aligning digital asset workflows with existing treasury and risk frameworks. Moreover, it reduces the need for crypto-native funds or unregulated vehicles to gain exposure to on-chain opportunities.

The firms present this as part of a long-term convergence between traditional capital markets and blockchain-based infrastructure. In a statement, Binance said that partnering with Franklin Templeton to offer tokenized real-world assets for off-exchange collateral settlement is a logical progression in its effort to bring digital assets and traditional finance closer together.

In summary, the Binance–Franklin Templeton initiative aims to lower counterparty risk, preserve yield, and enhance capital efficiency for institutions, while reinforcing the role of regulated custody in the evolving digital asset ecosystem.