Standard Chartered is further committing to offering cryptocurrency and digital asset solutions by partnering with crypto exchange OKX to launch a new off-exchange collateral product.
The two parties have joined forces to provide a new collateral mirroring programme, enabling institutional clients with an off-exchange collateral solution for tokenised money market funds.
This solution has been hailed by the UK bank as “groundbreaking” and “world-leading” as it seeks to significantly enhance security and capital efficiency for clients using a Globally Systemically Important Bank as a custodian for collateral management.
Margaret Harwood-Jones, Global Head of Financing and Securities Services at Standard Chartered, said: “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.”
The collateral mirroring programme is the latest initiative taken by Standard Chartered and OKX’s growing relationship. The UK bank selected OKX as its third-party crypto custodian last October for its global institutional businesses.
A pilot of the collateral solution has already been launched in the United Arab Emirates under the Dubai Virtual Asset Regulatory Authority’s (VARA) supervision and framework, with Standard Chartered leveraging OKX’s VARA regulatory licence.
The pilot demonstrated how clients can benefit from enhanced protection against counterparty risks, a growing concern in a digital asset market that is still maturing its security measures.
Hong Fang, President of OKX, added: “As the digital assets ecosystem becomes more ingrained within traditional finance, we strive to both drive growth and safeguard client assets in the most capital efficient manner.
“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.”
Frank Templeton Investments will be the first institutional client to onboard the money market collateral programme. The entity has a track record of leveraging blockchain technology to deliver solutions to clients.
The collaboration will see OKX clients benefit from access to on-chain assets developed by Franklin Templeton’s Digital Asset Team to integrate them into their financial and operational frameworks.
