- OKX and Standard Chartered program lets institutions use crypto as collateral securely.
- Standard Chartered acts as a regulated custodian for institutional crypto assets.
- Franklin Templeton joins OKX and Standard Chartered in offering tokenized MMFs.
OKX, in collaboration with Standard Chartered, has announced the launch of a new collateral mirroring program aimed at institutional clients. This initiative has received backing from Brevan Howard and Franklin Templeton, allowing clients to use cryptocurrencies and tokenized money market funds (MMFs) as off-exchange collateral for trading.
The program began operations on April 10 and functions within the regulations set by the Dubai Virtual Asset Regulatory Authority (VARA).
Enhanced Security for Institutional Clients
The collateral mirroring program addresses important security and capital efficiency concerns for institutional investors in the digital asset space. By utilizing Standard Chartered, a Globally Systemically Important Bank (G-SIB), as the custodian, the partnership ensures the safe storage of collateral. This adds an extra layer of security by minimizing counterparty risk, a major issue in the current crypto markets.
Standard Chartered will serve as an independent, regulated custodian in the Dubai International Financial Centre (DIFC), which is supervised by the Dubai Financial Services Authority. The custodianship protects financial assets as collateral while ensuring complete compliance with regulations.
Clients can incorporate cryptocurrencies and MMFs within financial operations through joint operations with their collateral storage remaining safe and secure.
Franklin Templeton and Brevan Howard Involved
Franklin Templeton’s participation introduces a groundbreaking stage for crypto and opens new possibilities for tokenized money market funds to lead the way. The asset management firm will build on-chain assets, one of the first MMFs structured under the new collateral mirroring, which the firm will be one of the first firms to offer institutional clients. This partnership represents a wider initiative enabling institutional clients to access these new financial instruments without facing risks from traditional crypto instruments.
Brevan Howard Digital, the crypto division of the global alternative investment manager, also joins the initiative. The early adoption by Brevan Howard demonstrates why institutions should implement new innovative solutions such as the collateral mirroring program. The partnership shows signs of growth with more MMFs scheduled to launch during the next several months.
Regulatory Framework and Future Growth
The program functions under the rules established by VARA to meet Dubai’s strict financial regulations. The regulatory framework adds credibility to the partnership, demonstrating why regulatory oversight is essential for developing the digital asset market. As more institutional clients seek reliable methods for engaging with cryptocurrencies, secure custody solutions have become paramount.
OKX and Standard Chartered’s partnership addresses trust and regulatory uncertainties with a secure, established solution. The joint platform defines advanced standards for institutional cryptocurrency services because it provides corporate clients with stable and compliant infrastructure for large-scale crypto trading operations.
