StanChart, OKX, Unveil Collateral Mirroring Solution

Standard Chartered and crypto exchange OKX have announced the launch of what they term a “ground-breaking” collateral mirroring programme, enabling institutional clients to utilise cryptocurrencies and tokenised money market funds as off-exchange collateral for trading.

The firms claim the initiative “significantly enhances security and capital efficiency for institutional clients by using a Globally Systemically Important Bank (G-SIB) as the custodian for their collateral”.

The collateral mirroring capability has been launched as a pilot within the Dubai Virtual Asset Regulatory Authority’s (VARA) regulatory framework, and sees Standard Chartered acts as the independent, regulated custodian in the Dubai International Financial Centre (DIFC), regulated by the Dubai Financial Services Authority, ensuring the safe storage of the assets used as collateral, while OKX through its VARA regulated entity, manages collateral and facilitates transactions. Franklin Templeton will be the first in a series of money market funds that will be offered under the OKX-SCB programme, the firms say.

“We understand the critical importance of robust and secure custody solutions, especially in the evolving digital asset landscape, and our collaboration with OKX to enable the use of cryptocurrencies and tokenised money market funds as collateral represents a significant step forward in providing institutional clients with the confidence and efficiency they need,” says Margaret Harwood-Jones, global head of financing and securities services at Standard Chartered. “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.”

Roger Bayston, Franklin Templeton head of digital assets, adds, “Leveraging blockchain technology, our platform is built to support the dynamic and ever-evolving financial ecosystem. 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.”

Brevan Howard Digital, the dedicated crypto and digital asset division of Brevan Howard, is among the first few institutions to onboard onto the programme, highlighting, StanChart says, the importance of such capabilities being offered by a leading international cross-border bank and a highly reputable global exchange.

Ryan Taylor, group head of compliance at Brevan Howard and CAO of Brevan Howard Digital, says, “This programme is the latest example of the continued innovation and institutionalisation 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.”