Binance, the world’s largest cryptocurrency exchange, is working with cryptocurrency trading firm Franklin Templeton to offer an off-exchange institutional collateral program, making digital markets more secure and capital efficient.
The new service allows eligible customers to use tokenized money market fund shares issued through Franklin Templeton’s Benji technology platform as off-exchange collateral to trade on Binance using Ceffu, the exchange’s partner custody layer.
The program alleviates a long-standing problem for institutional traders by allowing them to use traditional, regulated, yield-generating money market fund assets in digital markets without having to park them on an exchange, according to a press release.
The value of the fund shares issued by Benji is reflected in Binance’s trading environment, while the tokenized assets themselves are held securely off-exchange in regulated custody. This reduces counterparty risk, allowing institutional participants to earn yield and support their trading activity without custody coverage, liquidity or regulatory protections, the companies said.
“Partnering with Franklin Templeton to offer real-world tokenized assets for off-exchange collateral settlement is the natural next step in our mission to bring digital assets and traditional finance closer together,” said Catherine Chen, Head of VIP and Institutional at Binance.
