Groundbreaking Initiative for Institutional Crypto Collateral
Standard Chartered and OKX have partnered to launch an innovative collateral mirroring programme, enabling institutional clients to use cryptocurrencies and tokenised money market funds as off-exchange trading collateral. This programme represents a significant advancement in digital asset utilization within traditional finance.
Key Programme Features:
- Enhanced Security: Utilizes Standard Chartered's Globally Systemically Important Bank (G-SIB) custody infrastructure
- Capital Efficiency: Improves liquidity management for institutional traders
- Regulatory Compliance: Operates under Dubai VARA's regulatory framework
- Counterparty Risk Reduction: Provides enhanced protection against digital asset market risks
Institutional Endorsements and Partnerships
Margaret Harwood-Jones, Global Head of Financing and Securities Services at Standard Chartered, emphasized:
"Our collaboration with OKX represents a significant step forward in providing institutional clients with the confidence and efficiency they need in digital asset custody solutions."
Leading institutions including Brevan Howard Digital have already onboarded to the programme. Franklin Templeton will serve as the inaugural money market fund provider, with their tokenised assets available through the OKX-SCB programme.
Industry Perspectives
Hong Fang, President of OKX, stated:
"This partnership sets an industry standard for institutional clients to deploy trading capital at scale in a trusted environment."
Roger Bayston, Franklin Templeton Head of Digital Assets, commented on their blockchain approach:
"We enable true ownership, allowing assets to move and settle at blockchain speed - eliminating the need for traditional infrastructure."
Programme Implementation and Structure
The initiative operates through a clear division of responsibilities:
- Standard Chartered: Acts as regulated custodian in DIFC
- OKX: Manages collateral and facilitates transactions through its VARA-regulated entity
- Franklin Templeton: Provides tokenised money market fund products
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Frequently Asked Questions
What assets can be used as collateral?
The programme accepts cryptocurrencies and tokenised money market funds, with Franklin Templeton being the first approved fund provider.
How does this programme benefit institutional traders?
It offers:
- Enhanced capital efficiency
- Reduced counterparty risk
- Regulatory-compliant custody solutions
- Access to tokenised traditional finance products
What regulatory framework governs this programme?
The pilot operates under Dubai's Virtual Asset Regulatory Authority (VARA) regulations, with Standard Chartered regulated by DFSA in DIFC.
Industry Impact and Future Developments
This collaboration between traditional finance and crypto leaders signals growing institutional adoption of digital assets. The programme's success in Dubai may lead to expansion into other jurisdictions as regulatory frameworks evolve.
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Note: All investments involve risk, including loss of principal. Blockchain-based solutions are subject to evolving regulatory landscapes.