KEY TAKEAWAYS
- OKX partners with Standard Chartered to launch a collateral mirroring initiative for institutional clients, enhancing security and capital efficiency.
- The initiative, piloted under Dubai’s VARA framework, uses Standard Chartered as a regulated custodian to mitigate counterparty risk.
- Franklin Templeton and Brevan Howard are key participants, leveraging on-chain assets and tokenized money market funds for trading.
OKX has announced a new partnership with Standard Chartered to launch a collateral mirroring initiative aimed at institutional clients. This collaboration, which also involves Brevan Howard and Franklin Templeton, allows the use of cryptocurrencies and tokenized money market funds as off-exchange collateral for trading. The initiative is designed to enhance security and capital efficiency by utilizing a Globally Systemically Important Bank (G-SIB) as the custodian for collateral.
The collateral mirroring capability has been introduced as a pilot within the Dubai Virtual Asset Regulatory Authority’s (VARA) regulatory framework. This setup offers clients enhanced protection against counterparty risk, a significant concern in the digital asset markets. Standard Chartered will act as the independent, regulated custodian in the Dubai International Financial Centre (DIFC), ensuring the safe storage of assets used as collateral.
Franklin Templeton will be the first in a series of money market funds offered under the OKX-SCB program. By leveraging Standard Chartered’s global custodial position and OKX’s market leadership in cryptocurrency trading, the partnership aims to set an industry standard for institutional clients to deploy trading capital at scale in a trusted environment.
Institutional Access to On-Chain Assets
Through this collaboration, clients will gain access to on-chain assets developed by Franklin Templeton’s Digital Assets Team, integrating them into their financial and operational structures. Brevan Howard Digital, the crypto and digital asset division of Brevan Howard, is among the first institutions to join this program, highlighting the importance of such capabilities offered by a leading international bank and a reputable global exchange.
The partnership was announced here, emphasizing the strategic alignment between the involved parties to enhance the security and efficiency of digital asset trading for institutional clients.
Why This Matters: Impact, Industry Trends & Expert Insights
OKX and Standard Chartered have partnered to launch a collateral mirroring initiative for institutional clients, enhancing security and capital efficiency in digital asset trading.
Recent industry reports indicate that the tokenization of financial assets is gaining momentum, allowing for the digitization of real-world assets on blockchain. This trend is evident in the OKX and Standard Chartered partnership, which leverages tokenized money market funds as collateral to enhance liquidity and security.
As per insights from Osler, the use of reputable custodians is essential for securing digital assets. This reinforces the significance of Standard Chartered acting as the independent custodian in the partnership, ensuring robust asset protection and compliance within the Dubai International Financial Centre.
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