Standard Chartered, a licensed crypto custodian in the UAE, has partnered with OKX to introduce a collateral mirroring program. This initiative, operating under the regulatory framework of Dubai’s Virtual Asset Regulatory Authority (VARA), allows institutional clients to use crypto and tokenized money market funds as off-exchange collateral for trading.

According to MSN, the pilot program aims to enhance security and capital efficiency for institutional clients by utilizing a Globally Systemically Important Bank (G-SIB) as the custodian for their collateral. This collaboration represents a significant advancement in protecting against counterparty risk, ensuring that clients can trade with greater confidence.

Margaret Harwood-Jones, Global Head of Financing and Securities Services at Standard Chartered, emphasized the importance of secure custody solutions in the digital asset landscape. She remarked that the partnership with OKX will enable the use of crypto and tokenized money market funds as collateral, stating, “This represents a significant step forward in providing institutional clients with the confidence and efficiency they need. By leveraging our established custody infrastructure, we are ensuring the highest standards of security and regulatory compliance, fostering greater trust in the digital asset ecosystem.”

In October 2024, Standard Chartered began serving as the custodial provider for OKX, leveraging its global banking expertise to offer institutional investors a wider range of secure custody solutions. This move follows Standard Chartered receiving a digital asset custody service license from the Dubai Financial Services Authority (DFSA) in September 2024, which allows it to operate within the Dubai International Financial Centre (DIFC).

Brevan Howard Digital, the crypto division of Brevan Howard, has been confirmed as the first client for the new product. Ryan Taylor, Group Head of Compliance at Brevan Howard, expressed enthusiasm for the program, noting it reflects the ongoing innovation in the industry. He stated, “This program is the latest example of the continued innovation and institutionalization of the industry. As a significant investor in the digital assets space, we are thrilled to partner with industry leaders to further grow and evolve the crypto ecosystem globally.”

Additionally, Franklin Templeton will be the first money market fund offered under the OKX-Standard Chartered program. Hong Fang, President of OKX, highlighted that the partnership sets a new industry standard for institutional clients to deploy trading capital in a secure environment.

Franklin Templeton, known for tokenizing real-world assets, will provide OKX with access to on-chain assets developed by its digital asset team. Roger Bayston, Head of Digital Assets at Franklin Templeton, explained that their blockchain-enabled platform supports the evolving financial ecosystem, stating, “We take an authentic approach, from directly investing in blockchain assets to developing innovative solutions with our in-house team. By ensuring assets are minted on-chain, we enable true ownership, allowing them to move and settle at blockchain speed – eliminating the need for traditional infrastructure.”