The financial world is witnessing a pivotal shift as traditional banking giants and digital asset platforms deepen their collaboration. In a landmark move, Standard Chartered Bank and leading cryptocurrency exchange OKX have launched a pilot program enabling institutional clients to use crypto assets and tokenized money market funds (MMFs) as collateral—ushering in a new era of interoperability between conventional finance and blockchain-based infrastructure.
This initiative marks one of the first regulated frameworks in the Middle East where digital assets are formally integrated into institutional financing operations, with oversight from the Dubai Virtual Assets Regulatory Authority (VARA). Operating through its Dubai International Financial Centre (DIFC) entity, Standard Chartered acts as a licensed custodian, ensuring secure over-the-counter (OTC) handling of digital asset collateral.
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Bridging Traditional Finance and Blockchain Innovation
At the core of this pilot is the seamless integration of tokenized real-world assets (RWAs) into crypto finance ecosystems. The program allows institutions to pledge both cryptocurrencies and blockchain-issued MMFs—such as those created by Franklin Templeton—without needing to transfer assets directly to exchanges, thereby reducing counterparty risk and enhancing operational security.
Franklin Templeton, a pioneer in blockchain-driven asset management, has issued tokenized versions of its money market funds via its internal digital division. These tokens are now accessible to OKX’s institutional clients participating in the pilot. According to Roger Bayston, Head of Digital Assets at Franklin Templeton, “Tokenized MMFs enable near-instant settlement without reliance on legacy clearing systems—offering efficiency, transparency, and 24/7 liquidity.”
Standard Chartered plans to expand the range of accepted tokenized MMFs over time, aiming to provide broader collateral options that support crypto trading, lending, and financing activities across global markets.
Strengthening Institutional Confidence Through Regulation
One of the most significant aspects of this collaboration is its regulatory foundation. With VARA overseeing the pilot, it sets a precedent for compliant, transparent, and secure usage of digital assets within a structured legal environment. This level of oversight addresses long-standing concerns around custody, asset provenance, and investor protection—key barriers to wider institutional adoption.
Margaret Harwood-Jones, Global Head of Funding & Securities Services at Standard Chartered, emphasized the strategic importance:
“This partnership represents a critical step toward building trusted infrastructure for tokenized assets. By combining our regulated custody capabilities with cutting-edge blockchain solutions, we’re empowering institutions to operate with greater confidence in the digital asset space.”
Regulated custody is increasingly becoming a cornerstone of institutional engagement in crypto. Standard Chartered’s DIFC-based custody service—launched in April 2024—already supports Bitcoin and Ethereum holdings for qualified institutional clients. This new pilot expands that offering by introducing multi-asset collateralization models under active regulatory supervision.
Industry Adoption Grows: Brevan Howard Joins the Pilot
Brevan Howard Digital, a key player in the digital asset hedge fund space, is among the first firms testing this framework. Ryan Taylor, Chief Compliance Officer at Brevan Howard, highlighted the growing momentum:
“This pilot reflects the broader trend of institutions embracing digital assets. We’re committed to supporting the development of global crypto infrastructure that’s secure, scalable, and compliant.”
The participation of sophisticated financial players like Brevan Howard signals maturing market dynamics—where digital assets are no longer speculative instruments but integral components of diversified balance sheets and financing strategies.
Strategic Expansion in Digital Asset Services
This collaboration aligns with Standard Chartered’s broader ambition to lead in digital asset innovation globally. Since 2021, the UK-based multinational bank has been actively involved in shaping industry standards through partnerships with fintechs and blockchain platforms such as Coinbase, Huobi, and SIX Digital Exchange.
Their involvement in global consortia focused on promoting best practices in crypto custody and settlement underscores a long-term vision: integrating blockchain technology into mainstream financial workflows while maintaining compliance, resilience, and client trust.
Dubai’s emergence as a crypto-friendly jurisdiction makes it an ideal testing ground. With VARA providing clear regulatory guardrails, the city is positioning itself as a hub for institutional-grade digital asset services in the region.
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The Rise of Tokenized Real-World Assets
Tokenization—the process of converting physical or traditional financial assets into blockchain-based digital tokens—is gaining rapid traction. Money market funds are just the beginning. In the near future, we can expect tokenized bonds, equities, real estate, and even commodities to become common collateral types in decentralized and hybrid financial systems.
By enabling institutions to use these tokenized assets alongside native cryptocurrencies like BTC and ETH, this pilot accelerates the convergence of DeFi (decentralized finance) and TradFi (traditional finance), creating more efficient capital markets with reduced friction and faster settlement cycles.
Frequently Asked Questions (FAQ)
Q: What is the purpose of using crypto as collateral?
A: Using crypto assets as collateral allows institutions to access liquidity without selling their holdings. It supports borrowing, margin trading, and financing activities while maintaining exposure to potential price appreciation.
Q: Is this pilot open to retail investors?
A: No. This program is currently limited to institutional clients who meet specific eligibility criteria related to asset size, compliance standards, and risk management protocols.
Q: Which regulatory body oversees this pilot?
A: The Dubai Virtual Assets Regulatory Authority (VARA) is supervising the pilot, ensuring adherence to local laws and international financial standards.
Q: What types of tokenized assets are accepted?
A: Initially, tokenized money market funds (e.g., from Franklin Templeton) and major cryptocurrencies like Bitcoin and Ethereum are accepted. More tokenized real-world assets will be added over time.
Q: How does this benefit OKX clients?
A: Institutional clients on OKX gain access to regulated, high-quality collateral options that enhance their ability to trade and finance positions securely within compliant frameworks.
Q: Can other banks join similar initiatives?
A: Yes. While this is a joint effort between Standard Chartered and OKX, the model could inspire similar collaborations between other banks, custodians, and crypto platforms worldwide.
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Final Thoughts
The Standard Chartered and OKX pilot represents more than just a technical experiment—it's a signal of structural change in global finance. As tokenization matures and regulatory clarity improves, we’re moving toward a future where digital and traditional assets coexist seamlessly within unified financial systems.
For institutions seeking secure, compliant pathways into digital assets, initiatives like this offer a trusted bridge between legacy infrastructure and next-generation finance. With Dubai leading the charge in regulatory innovation, such cross-sector collaborations may soon become the norm rather than the exception.
As adoption grows, expect increased demand for interoperable custody solutions, standardized tokenization protocols, and robust regulatory frameworks—all essential ingredients for scaling the tokenized economy.
Keywords: crypto collateral, tokenized money market funds, Standard Chartered, OKX, Dubai VARA, institutional crypto adoption, digital asset custody, blockchain finance