Standard Chartered,OKX,Franklin Templeton Launch Crypto Collateral Pilot

Standard Chartered and OKX have initiated a pilot program that allows institutions to utilize crypto assets and tokenized money market funds (MMFs) as collateral. This program, announced on April 10, facilitates off-exchange collateral usage while enhancing security by placing custody with a globally systemically important bank. The pilot is being conducted under the regulatory oversight of the Dubai Virtual Asset Regulatory Authority, with Standard Chartered serving as a regulated custodian in the Dubai International Financial Centre (DIFC).

The program is a collaborative effort involving crypto-friendly asset manager Franklin Templeton and features Brevan Howard Digital among the first institutions to trial the new capability. OKX clients will gain access to onchain assets developed by Franklin Templeton’s digital assets team. Franklin Templeton’s head of digital assets, Roger Bayston, emphasized the authenticity of their approach, stating that by minting assets onchain, they enable true ownership and eliminate the need for traditional infrastructure. Franklin Templeton will be one of the first in a series of MMFs expected to be offered under the program by Standard Chartered and OKX.

In the crypto lending industry, collateral refers to any blockchain-based asset used to secure loans from a lender. By allowing borrowers to pledge these assets, lenders ensure that the loan will be repaid. Despite the high volatility of digital assets, Standard Chartered’s global head of financing and securities services, Margaret Harwood-Jones, is optimistic about the potential of crypto collaterals. She views this as a major step in the evolution of institutional crypto services, providing clients with the confidence and efficiency they need. Harwood-Jones highlighted that by leveraging their established custody infrastructure, they are ensuring the highest standards of security and regulatory compliance, fostering greater trust in the digital asset ecosystem.

Ryan Taylor, group head of compliance at Brevan Howard, noted that the program is another example of the ongoing innovation and institutionalization in the crypto industry. As a significant investor in the digital assets space, Brevan Howard is excited to partner with industry leaders to further grow and evolve the crypto ecosystem globally.