Standard Chartered, OKX Launch Crypto Collateral Programme
Standard Chartered and OKX have launched a collateral mirroring programme that allows institutional clients to use cryptocurrencies and tokenised money market funds as collateral for trading activities.
The initiative addresses security concerns in digital asset markets by enabling clients to keep their collateral with a regulated bank custodian rather than on an exchange.
This arrangement comes at a time when institutional investors remain wary of exchange counterparty risk following several high-profile collapses in the crypto sector.
Under the programme, Standard Chartered serves as the independent custodian while OKX manages the collateral allocation and facilitates trading transactions.
Franklin Templeton, the global investment management firm, will provide tokenised money market funds that can be used as collateral within this structure.
Enhanced security through bank custody
The programme operates as a pilot within the Dubai Virtual Asset Regulatory Authority's framework, with Standard Chartered holding the assets in custody in the Dubai International Financial Centre under Dubai Financial Services Authority regulation.
“We understand the critical importance of robust and secure custody solutions, especially in the evolving digital asset landscape,” says Margaret Harwood-Jones, Global Head of Financing and Securities Services at Standard Chartered.
“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 using a Globally Systemically Important Bank (G-SIB) – banks deemed so vital that their failure would threaten the international financial system – as custodian, institutional clients can trade on OKX while maintaining their collateral in bank custody.
This structure potentially resolves one of the main barriers to institutional crypto adoption: concerns about leaving assets on exchanges.
Hong Fang, President of OKX, says: “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.”
Tokenised assets integration
Franklin Templeton's participation signals a deepening commitment to its digital asset strategy.
The investment manager's tokenised money market fund will pioneer a series of similar products offered through the programme, highlighting how traditional financial instruments are increasingly migrating to blockchain technology.
Tokenisation – creating digital representations of assets on a blockchain – enables direct ownership transfers without conventional settlement processes, potentially reducing costs and settlement times. The technology has gained traction among asset managers looking to modernise fund structures.
Roger Bayston, Franklin Templeton Head of Digital Assets, emphasises the firm’s blockchain-native approach: “Leveraging blockchain technology, our platform is built to support the dynamic and ever-evolving financial ecosystem.
“We take an authentic approach, from directly investing in blockchain assets to developing innovative solutions with our in-house team.
“By ensuring assets are minted on-chain, we enable true ownership, allowing them to move and settle at blockchain speed – eliminating the need for traditional infrastructure.”
Institutional adoption
The programme has already attracted Brevan Howard Digital, the crypto division of alternative investment manager Brevan Howard, which manages over US$2bn in digital assets.
Its participation suggests a growing appetite for institutional-grade crypto infrastructure that bridges traditional finance and digital markets.
This hybrid approach – keeping collateral with a regulated bank while trading on a cryptocurrency exchange – could significantly expand institutional participation in digital asset markets.
The structure enables institutions to maintain their compliance requirements while accessing crypto markets without transferring assets directly to exchange wallets.
Ryan Taylor, Group Head of Compliance at Brevan Howard and CAO of Brevan Howard Digital, views the programme as evidence of market maturation: “This programme is the latest example of the continued innovation and institutionalisation of the industry.
“As a significant investor in the digital assets space, we are thrilled to partner with industry leaders to further grow and evolve the crypto ecosystem globally.”
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