TL;DR
- Standard Chartered and OKX launch a pilot program that allows institutional use of crypto assets and tokenized money market funds as collateral.
- The scheme operates under VARA regulation and combines banking security with the flexibility to operate outside centralized exchanges.
- The system uses “collateral mirroring,” keeping assets under custody at Standard Chartered while OKX manages the collateral.
Standard Chartered and OKX have announced the launch of a pilot program that enables institutional clients to use cryptocurrencies and tokenized money market funds as collateral for their operations.
This initiative operates within the regulatory framework of Dubai’s Virtual Assets Regulatory Authority (VARA) and aims to improve capital efficiency and security in off-exchange crypto transactions.
Standard Chartered Acts as Custodian Bank
The proposal relies on a “collateral mirroring” mechanism, which allows institutions to use crypto assets and tokenized money market funds as collateral without removing them from Standard Chartered. The bank serves as the custodian under international regulatory oversight within the Dubai International Financial Centre (DIFC), while OKX manages the collateral and facilitates the transactions through its VARA-regulated entity.
Franklin Templeton is participating as the first provider of tokenized money market funds available to OKX clients. These assets are developed directly by its digital asset team and are natively integrated into the blockchain, enabling fast transfers and eliminating reliance on traditional financial infrastructure. According to the company, this approach ensures clear asset ownership and direct settlement at blockchain speed.
Banking Infrastructure with Blockchain Technology
Brevan Howard Digital, the digital asset division of investment manager Brevan Howard, is among the initial group of institutions gaining access to the program. The firm highlighted the importance of solutions that merge the infrastructure of traditional banks with the agility of the crypto ecosystem.
Standard Chartered emphasized the need for custody solutions that are prepared to handle emerging risks. Security remains a top priority for institutions. The initiative seeks to provide a reliable operational environment that meets regulatory requirements without compromising the flexibility of digital assets.
OKX, meanwhile, noted that the collaboration allows its institutional clients to deploy capital more efficiently by integrating traditional and digital assets within a unified operational structure.
