In a landmark move set to reshape institutional engagement with digital assets, Standard Chartered and OKX have launched a pioneering collateral mirroring programme—a first-of-its-kind initiative enabling institutional clients to use cryptocurrencies and tokenised money market funds as off-exchange collateral for trading. Backed by robust custody infrastructure and regulatory alignment, this collaboration marks a significant leap toward mainstream financial integration of digital assets.
This groundbreaking programme is being piloted under the Dubai Virtual Asset Regulatory Authority (VARA) framework, reinforcing Dubai’s position as a global hub for digital asset innovation. By combining Standard Chartered’s status as a Globally Systemically Important Bank (G-SIB) with OKX’s leadership in onchain technology and cryptocurrency exchange services, the initiative delivers enhanced security, capital efficiency, and regulatory compliance for institutional participants.
A New Era of Institutional Digital Asset Utilisation
The core innovation lies in the “mirroring” mechanism: digital assets remain securely held by Standard Chartered within the Dubai International Financial Centre (DIFC), regulated by the Dubai Financial Services Authority (DFSA). Meanwhile, OKX, through its VARA-regulated entity, manages the operational aspects of collateral use—enabling seamless trading activity without compromising asset safety.
This separation ensures that institutions can deploy capital efficiently while mitigating counterparty risk—a persistent concern in digital asset markets. With assets stored under a trusted, regulated custodian, clients gain confidence in both security and compliance.
Key Participants Driving Market Innovation
The programme has already attracted leading players across finance and digital assets:
- Franklin Templeton, a trailblazer in tokenised real-world assets (RWA), is the first asset manager to offer its tokenised money market funds through the platform. Clients will gain direct access to on-chain financial instruments developed by Franklin Templeton’s Digital Assets Team, enabling true ownership and instant settlement via blockchain.
- Brevan Howard Digital, the crypto-focused arm of the global alternative investment firm Brevan Howard, is among the first institutions to adopt the service. Their participation underscores growing demand from sophisticated investors for secure, scalable, and compliant digital asset infrastructure.
Strengthening Trust Through Strategic Collaboration
Margaret Harwood-Jones, Global Head of Financing and Securities Services at Standard Chartered, emphasized the strategic importance of secure custody in an evolving financial landscape:
“We understand the critical importance of robust and secure custody solutions, especially in the evolving digital asset landscape. Our collaboration with OKX 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.”
Standard Chartered’s role as an independent custodian brings decades of experience in securities services and cross-border financing. Its global reach and regulatory standing provide a trusted foundation for institutions navigating the complexities of digital asset adoption.
Bridging Traditional Finance and Onchain Innovation
Hong Fang, President of OKX, highlighted the transformative potential of the partnership:
“As digital assets become increasingly embedded in traditional finance, our goal is to drive growth while safeguarding client assets in the most capital-efficient way possible. By combining Standard Chartered’s global custodial excellence with OKX’s leadership in cryptocurrency trading, we’re setting a new industry standard—enabling institutions to deploy trading capital at scale in a trusted environment.”
This synergy between traditional banking infrastructure and cutting-edge blockchain capabilities exemplifies the convergence shaping the future of finance.
Franklin Templeton: Pioneering Tokenisation with Purpose
Roger Bayston, Head of Digital Assets at Franklin Templeton, explained the firm’s philosophy:
“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 focus on genuine onchain utility differentiates Franklin Templeton’s offerings and aligns perfectly with the programme’s vision of transparency, efficiency, and ownership.
Why This Matters for Institutional Investors
For institutional investors, three key benefits stand out:
- Capital Efficiency: By using crypto and tokenised funds as collateral, firms can unlock liquidity without liquidating positions—preserving exposure while enabling new trading opportunities.
- Enhanced Security: Assets are held by a G-SIB with proven custodial capabilities, significantly reducing counterparty risk.
- Regulatory Clarity: Operating within VARA’s framework provides a clear compliance pathway, essential for global institutions managing complex regulatory obligations.
These advantages address long-standing barriers to broader institutional adoption—security concerns, operational complexity, and regulatory uncertainty.
Frequently Asked Questions (FAQ)
Q: What is collateral mirroring?
A: Collateral mirroring is a mechanism where digital assets are securely held by a regulated custodian (like Standard Chartered), while their value is mirrored on-chain for use in trading or financing activities—enabling capital efficiency without transferring ownership.
Q: Which digital assets can be used as collateral?
A: Initially, cryptocurrencies and tokenised money market funds—such as those offered by Franklin Templeton—are eligible. More asset types may be added as the programme expands.
Q: Is this programme available globally?
A: Currently launched as a pilot under Dubai’s VARA regulatory framework, it primarily serves institutions operating in or connected to the DIFC. Expansion plans will depend on regulatory developments in other jurisdictions.
Q: How does this reduce counterparty risk?
A: Since assets are held by a regulated G-SIB custodian, clients avoid exposing their holdings to potentially unstable third parties or exchanges—providing stronger protection than traditional crypto lending arrangements.
Q: Can any institution participate?
A: Participation is currently limited to qualified institutional clients meeting regulatory and due diligence requirements. Early adopters include major asset managers and hedge funds like Brevan Howard Digital.
Q: What role does OKX play in this programme?
A: OKX operates the onchain infrastructure, manages collateral usage, and facilitates transactions through its regulated entity—ensuring seamless integration between traditional custody and digital asset execution.
The Road Ahead: Mainstream Adoption Accelerates
With early adoption by respected names like Franklin Templeton and Brevan Howard Digital, this programme sets a precedent for how traditional finance can safely integrate digital assets. As more institutions seek efficient ways to leverage their crypto holdings, solutions like this will become increasingly vital.
The collaboration also signals a maturing ecosystem—one where innovation doesn’t come at the expense of security or compliance. Instead, it demonstrates that scalability, trust, and technological advancement can coexist.
As blockchain-based finance continues to evolve, initiatives like the Standard Chartered–OKX collateral mirroring programme will likely serve as blueprints for future integrations across banking, asset management, and trading platforms.
By aligning regulatory rigor with technological innovation, this partnership not only meets today’s institutional demands but also paves the way for tomorrow’s financial ecosystem—one where digital assets are fully interoperable with global markets.