The financial world is witnessing a transformative shift as traditional banking giants and digital asset innovators converge to redefine capital efficiency and institutional trust. In a landmark collaboration, Standard Chartered and OKX, a leading global cryptocurrency exchange and onchain technology company, have launched a pioneering collateral mirroring programme—a world-first initiative that allows institutional clients to use cryptocurrencies and tokenised money market funds as off-exchange collateral for trading.
This groundbreaking solution bridges the gap between traditional finance (TradFi) and decentralized finance (DeFi), offering enhanced security, regulatory compliance, and operational efficiency. By integrating Standard Chartered’s globally trusted custody infrastructure with OKX’s advanced digital asset trading capabilities, the programme sets a new benchmark for institutional participation in the digital asset economy.
How the Collateral Mirroring Programme Works
At its core, the collateral mirroring programme enables institutions to pledge digital assets—such as Bitcoin, Ethereum, or tokenised money market funds—as collateral for trading activities without transferring ownership or exposing assets to counterparty risk.
Standard Chartered, classified as a Globally Systemically Important Bank (G-SIB), serves as the independent and regulated custodian within the Dubai International Financial Centre (DIFC), operating under the oversight of the Dubai Financial Services Authority (DFSA). This ensures that client assets are held securely, meeting the highest standards of regulatory compliance and risk management.
Meanwhile, OKX—through its Virtual Asset Regulatory Authority (VARA)-regulated entity—manages the collateralisation process and facilitates seamless transaction execution. The pilot programme operates under VARA’s progressive regulatory framework, reinforcing Dubai’s position as a global hub for responsible digital asset innovation.
Enhancing Institutional Confidence Through Security & Compliance
One of the biggest barriers to widespread institutional adoption of digital assets has been counterparty risk—the fear that platforms may mishandle or lose client funds. This programme directly addresses that concern by introducing a trusted third-party custodian in Standard Chartered.
By leveraging an established financial institution for custody, clients benefit from:
- Reduced counterparty exposure
- Regulatory-grade security protocols
- Transparent audit trails
- Seamless integration with existing financial systems
Margaret Harwood-Jones, Global Head of Financing and Securities Services at Standard Chartered, emphasized the importance of secure custody in today’s evolving landscape:
“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.”
Tokenised Money Market Funds: A Gateway to Real-World Assets
A key component of this initiative is the integration of tokenised money market funds, starting with offerings from Franklin Templeton—one of the most respected names in asset management and real-world asset (RWA) tokenisation.
Through this partnership, OKX clients will gain access to on-chain versions of Franklin Templeton’s funds, developed by its dedicated Digital Assets Team. These tokenised assets offer:
- Instant settlement via blockchain
- 24/7 liquidity access
- Programmable compliance features
- True ownership and transferability
Roger Bayston, Franklin Templeton’s Head of Digital Assets, highlighted the strategic advantage:
“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.”
This integration marks a major milestone in the broader trend of real-world asset tokenisation, where trillions of dollars in traditional financial instruments are being reimagined on blockchain networks for greater accessibility and efficiency.
Early Adoption by Leading Financial Institutions
Brevan Howard Digital—the crypto-focused arm of global alternative investment firm Brevan Howard—is among the first institutions to adopt the programme. As a major player in digital asset investing, their participation underscores growing confidence in regulated, bank-backed crypto solutions.
Ryan Taylor, Group Head of Compliance at Brevan Howard and CAO of Brevan Howard Digital, noted:
“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.”
Their involvement signals that elite investment firms are no longer观望 (on the sidelines)—they’re actively integrating digital assets into core trading strategies, provided security and compliance are assured.
👉 See how leading hedge funds are using crypto collateral to scale their trading operations securely.
Frequently Asked Questions (FAQ)
Q: What is collateral mirroring?
A: Collateral mirroring is a mechanism that allows institutions to use digital assets held in secure custody as collateral for trading or financing activities without transferring ownership or exposing assets to exchange risk.
Q: Which assets can be used as collateral?
A: The programme supports major cryptocurrencies like Bitcoin and Ethereum, as well as tokenised money market funds such as those offered by Franklin Templeton.
Q: Is this programme available globally?
A: Currently launched as a pilot under Dubai’s VARA regulatory framework, it primarily serves clients operating within the DIFC. Expansion plans may follow based on regulatory approvals.
Q: Who holds custody of the assets?
A: Standard Chartered acts as the regulated custodian within the DIFC, ensuring high-security storage and compliance with international banking standards.
Q: How does this benefit institutional traders?
A: It improves capital efficiency by unlocking liquidity from idle digital assets, reduces counterparty risk through trusted custody, and enables seamless cross-market trading.
Q: Can retail investors participate?
A: This programme is designed exclusively for institutional clients. Retail access to similar services may come in future phases.
Driving the Future of Institutional Crypto Adoption
The collaboration between Standard Chartered, OKX, and Franklin Templeton exemplifies how collaboration across TradFi and crypto-native ecosystems can drive meaningful innovation. With capital efficiency, regulatory compliance, and security at its foundation, this programme paves the way for broader institutional adoption of digital assets.
As more asset managers explore tokenisation and banks expand their digital offerings, solutions like collateral mirroring will become essential infrastructure in the next-generation financial system.