In major news in the crypto and institutional finance world, tokenized money funds are stepping up to help large traders learn to put serious capital to work on exchanges without risking it all by leaving assets sitting on the platform.
Franklin Templeton and Binance are teaming up on a fresh program that’s already live, where big players can now leverage tokenized money funds. Quite specifically, tokenized shares from Franklin Templeton’s Benji platform as collateral for trading on Binance.
But here’s the fun part: underlying assets never actually hit the exchange. They stay safely tucked away in regulated, off-exchange custody.
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Instead of wiring over cash or crypto and hoping for the best, institutions pledge their tokenized money funds held with a trusted custodian.
Binance mirrors that collateral value right in its trading system, so clients can trade aggressively while the actual assets remain protected outside the platform. No more parking huge balances on centralized venues.
This setup directly tackles the counterparty nightmares we’ve seen from past exchange blowups and custody scares. Institutions have been hesitant to commit big money to platforms after those lessons, but tokenized money funds offer a smarter path forward and cut risk while keeping everything compliant and secure.
Those pledged assets keep earning yield, boosting overall capital efficiency compared to the old way of letting balances gather dust on an exchange.
Custody and smooth settlement come courtesy of Ceffu, Binance’s go-to institutional custody partner. They hold the tokenized money funds in a regulated setup, making sure everything stays rock-solid even as it’s used for active trading.
This collaboration is part of a bigger trend where traditional asset managers and banks are tweaking proven cash and liquidity tools like these money market funds for the tokenized era, rather than starting from scratch with pure crypto-native products.
The regulatory winds are shifting towards tokenized money funds
Just this week, SEC Commissioner Mark Uyeda highlighted that the agency needs to steer clear of throwing up “unnecessary roadblocks” as tokenization shifts from concept to real-world trading reality.
As such, tokenized money funds are proving they can bridge traditional finance and digital markets in a way that’s secure, efficient, and ready for prime time.
