From CoinDesk · By Olivier Acuna
Standard Chartered’s Dubai branch now offers regulated institutional custody of Ripple’s dollar-pegged RLUSD stablecoin on the XRP Ledger.
The bank and LMAX Group plan to let clients use RLUSD held at Standard Chartered as trading collateral without transferring it to the venue, subject to testing, regulatory requirements and approvals.
The arrangement advances Ripple’s effort to establish RLUSD as an institutional settlement and collateral asset while expanding Standard Chartered’s digital-asset custody business.
Global bank giant Standard Chartered now offers institutional custody of Ripple’s USD-pegged stablecoin RLUSD on the XRP Ledger through its Dubai branch, giving eligible clients a regulated bank to hold the dollar-pegged stablecoin.
The bank, with nearly $450 billion in assets under management, also plans to work with Ripple and LMAX Group, an institutional trading venue for foreign exchange and digital assets, so clients can use RLUSD held at Standard Chartered as collateral for trading on LMAX’s platform. That part of the arrangement is not yet live and remains subject to documentation, testing, regulatory requirements and internal approvals, the bank said on Monday via email.
LMAX plans to allow clients to use RLUSD held at Standard Chartered to back trades, so they would not need to transfer the stablecoin to the venue.
That could appeal to banks, funds and other institutions that want to trade with stablecoins but do not want to leave the assets at a trading venue. It separates custody from execution: the bank holds the tokens and the venue accepts their value as collateral.
“Regulated custody connected to a global systemically important bank is becoming one of the most valuable pieces of infrastructure in digital assets,” said Joseph Goh, head of Asia-Pacific at Singapore-based crypto investment bank Areta.
Waqar Chaudry, Standard Chartered’s global head of digital assets, securities services and transaction services, said “institutional clients want to participate in digital asset markets without compromising on how their assets are safeguarded or how risk is managed.”
The move builds on Ripple’s effort to position RLUSD as a settlement and collateral asset for institutions. Ripple provided LMAX with $150 million in financing in January as part of plans to embed the stablecoin in the group’s infrastructure, including for institutional trading.
The LMAX link, if completed, would give RLUSD another route into the collateral systems that sit behind institutional trading, rather than limiting the token to payments or spot settlement.
Standard Chartered has been expanding its custody operations in several financial centers. Last week, it said it planned to offer institutional clients in Singapore custody for selected cryptocurrencies, stablecoins and tokenized real-world assets, having fully acquired Zodia Custody earlier this year It became the first bank to distribute one of Hong Kong’s two regulated stablecoins in August.