Tokenized Collateral Confounds Banks: 24/7 Yields Now in Play

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Key takeaways:

  • Institutions may now pledge tokenized money market fund shares as collateral on Binance.
  • Assets stay under regulated third-party custody off-exchange.
  • Collateral value is reflected inside Binance’s trading theater via Ceffu.
  • The arrangement boosts capital efficiency while trimming counterparty risk.

The initiative, that sly and glittering premise, allows institutions to deploy yield-bearing traditional assets in the digital markets without surrendering custody to the exchange-town itself.

How the Program Works

Under this new architecture, tokenized money market fund shares are conjured through Franklin Templeton’s Benji Technology Platform. Eligible institutional clients may pledge these gleaming tokenized shares as off-exchange collateral when parading orders on Binance.

Rather than shipping assets onto the exchange like luggage, the underlying fund shares remain securely ensconced in third-party custody. Their value is mirrored within Binance’s trading chambers using the infrastructure supplied by Ceffu, Binance’s institutional custody partner. This neat arrangement lets institutions maintain regulatory protections and custody safeguards while actively deploying capital in the digital markets.

Improving Capital Efficiency

The program addresses a stubborn institutional itch: the need to post collateral on exchanges while trimming custody and counterparty risk. By permitting regulated, yield-bearing money market fund assets to serve as collateral, institutions can keep earning yield while supporting trading activity.

This setup softens the old rubric that security and speed must forever be at cross purposes. Participants no longer need to park vast seas of capital directly on an exchange to gain exposure, thereby refining liquidity management and the architecture of operational risk.

TradFi and Digital Assets Move Closer

The launch builds on the 2025 partnership between Franklin Templeton and Binance. Both firms cast the initiative as part of a grander design to bridge venerable financial infrastructure with blockchain-based markets.

Roger Bayston, Head of Digital Assets at Franklin Templeton, noted that the off-exchange collateral program lets clients set assets to work while preserving third-party custody protections. Catherine Chen, Head of VIP and Institutional at Binance, observed that weaving tokenized real-world assets into trading infrastructure marks a natural step toward an alliance of traditional and digital finance.

Ceffu’s leadership remarked that institutions increasingly demand trading models that prize robust risk management without sacrificing capital efficiency-especially in a realm that never truly sleeps thanks to 24/7 settlement cycles.

A Broader Institutional Trend

Demand for stable, yield-bearing collateral continues its ascent as institutions deepen their foray into digital markets. Tokenized money market funds present a familiar, regulated product structure adapted for blockchain-enabled trading environments.

By enabling traditional financial instruments to function within crypto trading infrastructure, the program signals the ongoing maturation of digital asset markets. It also reinforces the rising role of tokenization in reshaping how capital is deployed, secured, and settled across global markets.

As institutional adoption accelerates, infrastructure solutions that blend regulatory alignment, custody safeguards, and operational efficiency are likely to define the next phase of digital finance integration.

The information provided here is for educational purposes and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always do your own research and consult with a licensed financial advisor before making investment decisions.

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2026-02-11 13:26