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Banking giant Standard Chartered is trialling a new platform with cryptocurrency exchange OKX that lets institutions use tokenized funds and crypto as trading collateral.

As an experienced player in the tokenization sector, Standard Chartered plans to offer custody for these assets through its regulated infrastructure, using a collateral mirroring setup that keeps assets off-exchange while enabling real-time deployment for trading, an April 10 announcement from the bank noted. 

The pilot program is being conducted in the Dubai International Financial Centre under the oversight of the country’s Virtual Asset Regulatory Authority in compliance with local regulations.

At its core, the platform will function as a collateral mirroring setup that allows institutions to use crypto and tokenized money market funds for trading, without needing to store their assets on an exchange. 

Instead, the assets remain securely custodied with Standard Chartered, a globally systemically important bank (G-SIB), offering a major boost in security and regulatory compliance.

The process works by “mirroring” the collateral off-exchange, meaning institutions can still deploy capital efficiently in crypto markets while avoiding the counterparty risks typically associated with on-exchange holdings. 

OKX, through its Dubai-regulated entity, facilitates the transactions while Standard Chartered handles custody under DIFC’s framework.

Tokenization plays a key role in unlocking this model. By turning traditional money market funds into blockchain-based assets, the program allows for faster settlements, greater transparency, and real-time asset movement.

According to OKX President Hong Fang, the platform will allow institutional clients to “deploy trading capital at scale in a trusted environment.”

The pilot will see participation from some of the top names in traditional finance.

According to the announcement, US-based asset manager Franklin Templeton will be the first in a series of money market funds that will be offered under the OKX-SCB programme.

Meanwhile, Brevan Howard Digital, the crypto division of global investment firm Brevan Howard, will be among the first institutions to participate in the pilot.

In a report released the same day, blockchain payments firm Ripple predicted that the tokenization market could soar to $18.9 trillion over the next eight years, driven by enterprise adoption, regulatory clarity, and an uptick in demand among newer generations.

Last year, Standard Chartered projected the tokenization market could reach $30.1 trillion by 2034, underscoring its strong conviction in the sector’s long-term potential.

While many financial institutions are just beginning to explore this space, Standard Chartered has been laying the groundwork for years. 

The bank has previously backed blockchain initiatives like Partior and Zodia Markets and has tested tokenized deposits and digital custody solutions across multiple markets.

In late 2023, SC Ventures, the fintech investment arm of the banking group, announced Libeara.

Launched in Singapore alongside FundBridge Capital, the platform allows the creation of a tokenized Singapore dollar government bond fund for accredited investors.

This year in February, China Asset Management Hong Kong, a leading fund house in the region, collaborated with Standard Chartered to issue one of the first tokenized money market funds in Asia on Libeara, targeting retail investors.

Last year, Liberia debuted the Delta Wellington Ultra Short Treasury On-Chain Fund, a tokenized US treasury fund.

Beyond tokenization, Standard Chartered has also established a significant presence in the digital asset custody space, with operations spanning multiple jurisdictions..

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