Franklin Templeton and Binance Launch Off-Exchange Collateral for Institutional Crypto Traders

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Franklin Templeton and Binance launch off-exchange collateral for institutional crypto traders.

Franklin Templeton and Binance have launched an institutional off-exchange collateral programme using tokenized money market fund shares, now live for eligible clients.
Tokenized MMF shares are issued via Franklin Templeton's Benji Technology Platform and held in regulated custody by Ceffu, without being transferred to Binance's exchange.
The structure allows institutions to earn yield from MMF holdings while simultaneously using that same capital as margin collateral on Binance.
The model is designed to eliminate exchange counterparty risk - a long-standing concern for institutional digital asset traders such as hedge funds and family offices.
Ceffu is licensed in Dubai, and similar collateral models are operating under DIFC and VARA frameworks, reinforcing the programme's regional relevance.
Participation is limited to institutional counterparties and requires completion of KYC, AML, and onboarding procedures under applicable local regulations.

Benji Technology Platform and Ceffu Custody Underpin a New Model for Institutional Collateral

The programme combines Franklin Templeton's Benji Technology Platform - a blockchain-based system for issuing regulated, yield-bearing tokenized money market fund (MMF) shares - with custody services from Ceffu, Binance's institutional-grade, crypto-native custody partner. Together, these two components form the infrastructure layer that keeps client assets in regulated custody while enabling active trading on Binance. Ceffu holds a licence in Dubai, and its involvement reflects growing institutional adoption of digital asset infrastructure within the Virtual Assets Regulatory Authority (VARA) framework.

A parallel initiative in the UAE - involving Standard Chartered, OKX, and Franklin Templeton - uses a similar off-exchange custody model operating from the Dubai International Financial Centre (DIFC), regulated by the Dubai Financial Services Authority (DFSA). Taken together, these programmes signal that regulated, custody-based collateral structures are becoming standard infrastructure for institutional digital asset access in the region. For alternative investment managers and hedge funds active in UAE markets, both frameworks offer a compliant pathway to trade digital assets without breaching internal policies on exchange exposure.

How the Programme Works

Eligible institutions subscribe to tokenized MMF shares issued through the Benji platform and place those tokens into a Ceffu custody account. The collateral value of those shares is then recognised by Binance's risk engine for margin purposes, without the tokens ever leaving regulated custody. Client assets are held off-exchange at all times, and only their collateral value is reflected within Binance's trading environment.

The underlying MMF portfolios invest in high-quality, short-duration instruments consistent with institutional collateral standards. Franklin Templeton emphasises that these are regulated, audited funds, providing the transparency and oversight that institutional investors require. This alignment with conventional finance instruments is central to the programme's appeal for managers who must satisfy internal investment committees and regulatory requirements on collateral quality.

Solving a Long-Standing Risk for Institutional Traders

Historically, institutional participants in digital asset markets - including hedge funds, proprietary trading firms, and family offices - have had to hold cash, stablecoins, or other assets directly in exchange wallets to meet margin requirements. This approach exposes those balances to exchange failures or operational disruptions, a risk that became acute during the high-profile exchange collapses of recent years. The off-exchange model directly addresses this vulnerability.

By keeping assets with a regulated third-party custodian rather than on Binance's balance sheet, institutions retain clearer legal ownership and benefit from segregated asset arrangements. This structure aligns crypto trading practices more closely with traditional finance standards for collateral management and credit exposure. According to Africa Global Funds, the programme is explicitly designed to remove the need for institutions to park large amounts of idle capital directly on exchanges.

Capital Efficiency: Earning Yield While Trading

A key commercial benefit is that institutions can earn yield from their MMF holdings while simultaneously using the same capital as trading margin on Binance. This removes the traditional trade-off between keeping assets in safe, income-generating instruments and deploying capital onto an exchange for active trading. The dual-use structure is described by both parties as a meaningful improvement in capital efficiency for institutional crypto strategies.

Roger Bayston, who leads Franklin Templeton's Digital Assets business, has stated that the framework prevents customer assets from being transferred to the exchange while still allowing those assets to generate yield and support trading activity. Ceffu CEO Ian Loh has noted that "institutions increasingly require trading models that prioritise risk management without sacrificing capital efficiency." Binance characterises the initiative as making digital markets more secure and capital-efficient for institutional participants.

Programme Timeline and Strategic Context

Franklin Templeton and Binance first announced their broader strategic collaboration in September 2025, with a focus on tokenization and institutional-grade solutions at the intersection of traditional and digital markets. The off-exchange collateral programme is the first product to emerge from that partnership. According to Crypto Briefing, the move from partnership announcement to live programme took just a few months, indicating rapid development of the underlying tokenization and custody framework.

The initiative is part of a wider industry trend in which banks, exchanges, and asset managers are converging on off-exchange and tri-party-style collateral arrangements for digital assets. Franklin Templeton's involvement across multiple such programmes - including the DIFC-based initiative with Standard Chartered and OKX - positions the firm as an active bridge between regulated fund management and institutional crypto infrastructure.

Eligibility, Compliance, and Availability

The programme is limited to institutional and professional counterparties, reflecting the complexity of the collateral and custody arrangements involved. Participation requires completion of Binance's and Ceffu's onboarding procedures, including know-your-customer (KYC) and anti-money-laundering (AML) checks. Binance notes that availability is subject to local regulatory permissions and may vary by jurisdiction.

Institutions must ensure their participation complies with applicable securities, funds, and virtual asset regulations in relevant jurisdictions - including the EU, UK, US, and the UAE. Rules governing the use of collective investment schemes as collateral, the tokenization of fund shares, and cross-border offering of money market products are all relevant considerations. The use of regulated MMFs and licensed custodians is presented as the primary mechanism for aligning the programme with institutional and regulatory expectations.