TLDR
- Binance has partnered with Franklin Templeton to offer a new collateral solution for institutional crypto traders.
- Institutional clients can now use tokenized money market fund shares as collateral while keeping assets off-exchange.
- The assets remain securely held in regulated custody with Ceffu, Binance’s institutional custody partner.
- The new program helps reduce counterparty risk and enhances capital efficiency for institutional traders.
- The partnership bridges traditional finance with digital markets, offering a safer way for institutions to trade.
Binance and Franklin Templeton have partnered to offer a new program designed to address key challenges for institutional crypto traders. This collaboration enables large traders to use tokenized money market funds as off-exchange collateral while ensuring that the assets stay secure in regulated custody. The initiative allows clients to trade on Binance without transferring their assets onto the exchange, addressing ongoing concerns around counterparty risk and custody.
Tokenized Shares as Collateral for Crypto Traders
The newly launched program allows institutional clients to use tokenized shares of money market funds issued through Franklin Templeton’s Benji platform as collateral. This collateral is pledged to Binance while the underlying assets are securely held off-exchange in regulated custody. The innovative setup ensures that the assets remain safe and intact with a custodian, while the tokenized value is mirrored within Binance’s trading environment.
By adopting this model, clients can trade without having to move their funds onto the exchange, reducing exposure to risks linked to custody and liquidity. This structure makes it easier for institutional investors to participate in digital markets while maintaining security. Binance and Franklin Templeton are addressing a critical issue for large-scale crypto traders, who have often been hesitant to park funds on centralized platforms.
Franklin Templeton Partners with Binance for Secure Capital Deployment
Franklin Templeton’s involvement in the new service comes through its Benji Technology Platform, which tokenizes money market fund shares. These tokenized shares serve as an off-exchange collateral solution for Binance users, improving the capital efficiency of institutional traders. Instead of having to park funds directly on the exchange, traders can continue to earn yield from their assets while using them as collateral for their trades.
The partnership also enhances the security of institutional trading on Binance, a platform that has faced scrutiny due to previous failures in the industry. With this new system, institutions can avoid counterparty risk while engaging in trading activities. Ceffu, Binance’s institutional custody partner, is responsible for ensuring that the tokenized shares are held in a regulated and secure environment.
Impact on Institutional Crypto Trading
The partnership marks a step forward in bridging traditional finance with the rapidly evolving world of digital assets. By integrating traditional, yield-bearing assets into the digital market, Binance and Franklin Templeton are providing institutions with a safer and more efficient method to trade crypto assets. The program is also part of a broader push to make tokenized real-world assets more accessible in digital markets without relying on crypto-native funds.
Catherine Chen, Head of VIP & Institutional at Binance, emphasized the importance of the partnership, saying, “Partnering with Franklin Templeton to offer tokenized real-world assets for off-exchange collateral settlement is a natural next step in our mission to bring digital assets and traditional finance closer together.”
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