Standard Chartered is working with crypto exchange OKX on a collateral mirroring programme, enabling institutional clients to utilise cryptocurrencies and tokenised money market funds as off-exchange collateral for trading.
The partners say that the programme boosts security and capital efficiency for institutional clients by using a so-called 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 regulatory framework, promising clients enhanced protection against counterparty risk, a significant concern in the current digital asset markets.
Standard Chartered acts as the independent, regulated custodian ensures the safe storage of the assets used as collateral, while OKX, through its VARA regulated entity, manages collateral and facilitates transactions.
Margaret Harwood-Jones, global head, financing and securities services, Standard Chartered, says: "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.
"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."
Franklin Templeton will be the first in a series of money market funds that will be offered under the OKX-SCB programme. The dedicated crypto and digital asset division of alternative asset manager Brevan Howard is among the first to onboard onto the programme.
Hong Fang, president, OKX, says: "By leveraging Standard Chartered’s position as a top custodian globally, as well as OKX’s market leadership in cryptocurrency trading, the partnership sets an industry standard for current and potential institutional clients to deploy trading capital at scale in a trusted environment."
Earlier this year, OKX operator Aux Cayes Fintech was hit with $504 million in fines and fees after admitting breaking US anti-money laundering laws.