Standard Chartered Bank and OKX, a leading cryptocurrency exchange and global onchain technology company, have unveiled an innovative collateral mirroring programme, allowing institutional clients to use cryptocurrencies and tokenized money market funds as off-exchange collateral for trading. This initiative enhances security and capital efficiency by leveraging a Globally Systemically Important Bank (G-SIB) for custody.
Key Features of the Programme
- Crypto and Tokenized Collateral: Supports cryptocurrencies and tokenized money market funds (e.g., Franklin Templeton’s fund).
- Enhanced Security: Custodied by Standard Chartered in Dubai’s DIFC, regulated by DFSA.
- Counterparty Risk Mitigation: Pilot launched under Dubai’s VARA framework to reduce institutional exposure.
- Capital Efficiency: Clients optimize trading capital while maintaining asset safety.
Industry Leadership
Margaret Harwood-Jones, Standard Chartered’s Global Head of Financing and Securities Services, emphasized:
"Our collaboration with OKX bridges traditional custody and digital assets, offering institutional clients regulatory-compliant solutions with maximum security."
Hong Fang, OKX President, added:
"Partnering with Standard Chartered sets a new benchmark for institutional crypto adoption, combining their custodial expertise with OKX’s trading leadership."
Franklin Templeton’s Role
As a pioneer in tokenization and real-world assets (RWA), Franklin Templeton integrates blockchain technology to enable:
- Instant settlement of on-chain assets.
- Direct ownership without traditional intermediaries.
Roger Bayston, Head of Digital Assets at Franklin Templeton, noted:
"Blockchain-native solutions like ours eliminate legacy infrastructure barriers, empowering true asset mobility."
Early Adopters
Brevan Howard Digital, the crypto arm of Brevan Howard, is among the first institutions onboarded.
Ryan Taylor, Brevan Howard’s Group Head of Compliance, stated:
"This programme reflects the maturation of crypto markets and our commitment to advancing institutional-grade solutions."
FAQs
1. What is collateral mirroring?
Collateral mirroring allows institutional traders to pledge crypto/tokenized assets as collateral for off-exchange transactions, improving capital utility.
2. How does Standard Chartered ensure asset safety?
Assets are held in DIFC-regulated custody under DFSA oversight, adhering to strict financial security standards.
3. Which assets are eligible?
Initially, Franklin Templeton’s tokenized money market fund; additional digital assets will follow.
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4. What regulatory framework governs this programme?
The pilot operates under Dubai’s VARA guidelines, ensuring compliance with virtual asset regulations.
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5. Why is this significant for traditional finance?
It bridges TradFi and DeFi, enabling institutions to engage with digital assets securely at scale.
Keywords: collateral mirroring, tokenized assets, institutional crypto, Standard Chartered, OKX, VARA, real-world assets (RWA), blockchain custody
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