Institutional investors now have a new way to trade cryptocurrencies without depositing their assets directly on an exchange. This milestone follows Binance and Franklin Templeton announcing an off-exchange collateral program built around tokenized money market funds (MMFs).
While this effort reflects a broader shift towards real world asset (RWA) tokenization and infrastructure tailored to the needs of large financial institutions, risks remain.
Binance and Franklin Templeton launch off-exchange crypto collateral for institutions
Binance co-CEO Richard Teng confirmed the launch, saying that institutional clients can now use tokenized MMF shares issued through Franklin Templeton’s Benji Technology platform as collateral for trades on Binance.
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“…improve efficiency and bring TradFi and cryptocurrencies closer together,” Teng said.
Under the program, eligible institutions can use tokenized shares of Franklin Templeton’s regulated MMFs as collateral while placing those assets under third-party control.
Instead of moving funds to an exchange, the value of the collateral is reflected within Binance’s trading environment using infrastructure provided by our custodian partner Ceffu.
This structure addresses counterparty risk, a long-standing concern among institutional investors. This is similar to how Bitcoin ETFs helped quell financial institutions’ concerns about crypto exposure.
By storing assets off-exchange, companies can access liquidity and trading opportunities while reducing exposure to exchange failure.
This design also improves capital efficiency. Traditional collateral placed on exchanges often does not yield yield. However, MMFs generate profits and allow financial institutions to maintain capital productivity while supporting trading activities.
“Our off-exchange collateral program provides our clients with a new way to securely earn yield while making it easier to leverage their assets in third-party custody,” Roger Bayston, Head of Digital Assets at Franklin Templeton, said in an excerpt from the announcement.
Meanwhile, Binance’s head of VIP and institutions Catherine Chen sees the move as part of a broader effort to integrate TradFi products into blockchain-based markets.
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Milestones in Binance and Franklin Templeton Partnership
This announcement marks the first live product from the strategic partnership announced in September 2025. It also highlights the accelerating role of tokenized RWAs in cryptocurrency markets, particularly in low-volatility products such as Treasury-backed funds and money market products.
Industry insiders say there is a growing demand for high-yield collateral that can support 24/7 trading cycles.
“Financial institutions are increasingly seeking trading models that prioritize risk management without sacrificing capital efficiency,” said Ian Loh, CEO of Ceffu.
Meanwhile, Binance community representatives emphasized that custody, yield, and operational safety measures remain top priorities for institutional investors.
This is especially true in markets shaped by memories of currency failures and liquidity shocks in previous cycles.
Why timing will matter in 2026
The launch comes at a time when the crypto market is witnessing volatility and more cautious institutional sentiment.
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Bitcoin and other major assets are experiencing a period of deleveraging, with some institutional capital flows slowing from their 2025 highs. BeInCrypto recently reported that $3 billion has flown out of the market in two weeks, with Bitcoin ETF investors facing an 8% loss.
In this environment, infrastructure that reduces storage risk while preserving revenue could be more attractive to participants such as:
Hedge funds, asset management companies, and corporate treasuries
However, this is conditional on these players remaining interested in digital assets but wary of exposing themselves to operational risks.
More broadly, this effort is consistent with a growing trend toward tokenization. Analysts widely expect RWA to play a central role in the next phase of cryptocurrency adoption, providing stable collateral and bridging traditional financial markets and blockchain networks.
Centralization concerns and hidden trade-offs
Despite the enthusiasm, caution is important, as the new structure does not eliminate risk but redistributes it. Although the assets remain off-exchange, trade execution, valuation reflection, and liquidity are still highly dependent on the Binance ecosystem and operational stability.
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Such a hybrid model is likely to reinforce the dominance of large, centralized platforms, rather than promoting the decentralized ideals that initially defined crypto markets.
There are also operational and regulatory considerations.
Tokenized assets bring inherent risks to blockchain, and the cross-border rules governing custody and tokenization continue to change.
As a result, institutions participating in such programs must navigate complex compliance requirements that can vary by jurisdiction.
Despite the warnings, Binance and Franklin Templeton’s efforts reflect an important reality of cryptocurrencies’ current stage of growth. In other words, institutional adoption is increasingly driven by infrastructure rather than by speculative excitement.
Programs that address custody, capital efficiency, and risk management are becoming the cornerstone of institutional investor engagement. While retail traders may feel little immediate impact, the long-term significance lies in how these tools reshape market structure.
In that sense, the new collateral program is less a sudden revolution and more a gradual transformation that brings digital assets closer to TradFi’s operating standards, as debates around centralization and control shape the future of the industry.
