Tokenized Funds Gain Traction as Trading Collateral — But Regulators Raise Concerns

[cryptoenthusiast]

Franklin Templeton’s new framework reflects a broader trend: tokenized real-world assets increasingly being used as onchain trading collateral. Similar models include BlackRock’s BUIDL tokenized Treasury fund, which is also accepted on Binance and other platforms, as well as products from WisdomTree and Ondo exploring comparable structures.

While the approach offers institutions a way to replace idle stablecoins with low-volatility, yield-bearing instruments, regulators are watching closely. The International Organization of Securities Commissions (IOSCO) has warned that cross-border tokenization structures may create regulatory arbitrage risks if oversight does not keep pace. As traditional asset managers and crypto exchanges deepen collaboration, the balance between innovation and regulatory coordination will likely shape the next phase of institutional adoption.

[nihalsari]

me: stablecoins sitting idle
institutions: nah we’ll make them earn yield and still trade crypto, fancy