Standard Chartered recently started working with a popular crypto exchange OKX, developing a collateral mirroring program that would allow institutional clients to use crypto and tokenized money market funds as off-exchange collateral for trading.

The two companies said that the program will be marked by elevated security and capital efficiency — two things that institutional clients value most. This will be enabled by using the so-called Globally Systematically Important Bank (G-SIB), which will act as the custodian for their collateral.

The two firms created their collateral mirroring capability as a pilot in collaboration with the Dubai Virtual Asset Regulatory Authority, using its regulatory framework. As such, they can promise their institutional clients enhanced protection against counterparty risk, which is a major concern in the current crypto market.

Meanwhile, Standard Chartered will act as an independent, regulated custodian, meaning that it will ensure the safe storage of the assets that the clients decide to use as collateral. OKX, on the other hand, will manage collateral and facilitate transactions thanks to its VARA-regulated entity.

The Partners Are Focused On Security And Regulatory Compliance

Standard Chartered’s global head of financing and securities services, Margaret Harwood-Jones, stated that the bank understands the critical importance of robust and secure custody solutions, particularly in this still-evolving digital asset landscape.

This is why its collaboration with OKX aims to enable the use of crypto and tokenized money market funds as collateral, to represent a major step forward in providing institutions with the efficiency and confidence they expect.

“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,” she added.

The first in a long series of money market funds that will be offered under the new program will be Franklin Templeton, while Brevan Howard’s crypto and digital asset division will also be among the first to join the program.

OKX’s president, Hong Fang, also commented on the matter, stating that leveraging Standard Chartered’s position as a top custodian globally, in combination with OKX’s market leadership in crypto trading, will allow the partnership to set a standard for current and potential institutional clients.