Standard Chartered and OKX, a leading cryptocurrency exchange and global on-chain technology firm, have announced the launch of a groundbreaking mirror collateral program. This initiative enables institutional clients to utilize cryptocurrencies and tokenized money market funds as over-the-counter (OTC) transaction collateral. By leveraging a globally systemically important bank (G-SIB) as a custodian, the program significantly enhances security and capital efficiency for institutional participants.
Key Features of the Mirror Collateral Program
1. Enhanced Security Through Institutional Custody
- Role of Standard Chartered: Acts as a regulated depository under Dubai’s Financial Services Authority (DFSA), ensuring compliance and asset safety.
- OKX’s Functionality: Manages collateral and transactions via its VARA-regulated entity in Dubai.
2. Regulatory Pilot Framework
- Operates within Dubai’s Virtual Asset Regulatory Authority (VARA) guidelines, addressing counterparty risk—a critical challenge in digital asset markets.
3. Integration of Tokenized Assets
- Franklin Templeton Partnership: Offers tokenized money market funds, enabling seamless blockchain-based asset integration.
- Brevan Howard Digital: Among the first institutional adopters, validating the program’s credibility.
Industry Perspectives
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Margaret Harwood-Jones, Standard Chartered
"Our custody infrastructure ensures regulatory compliance while bridging digital and traditional finance. Collaborating with OKX allows clients to operationalize capital efficiently."
Hong Fang, OKX President
"This partnership sets industry standards for institutional crypto adoption, combining OKX’s trading expertise with Standard Chartered’s custodial trust."
Roger Bayston, Franklin Templeton
"Blockchain-native assets provide true ownership, eliminating legacy settlement delays."
FAQ
Q1: What is mirror collateral?
A: It allows digital assets to serve as OTC collateral, mirrored by a custodian-held equivalent.
Q2: How does this reduce counterparty risk?
A: Custodial segregation ensures collateral remains secure even if a trading counterparty defaults.
Q3: Which assets are eligible?
A: Cryptocurrencies and tokenized funds (e.g., Franklin Templeton’s offerings).
Q4: Is this available globally?
A: Currently piloted in Dubai’s DIFC, with plans for expansion.
Q5: Who can participate?
A: Institutional clients meeting compliance criteria.
Future Outlook
The program highlights accelerating institutional adoption of blockchain-based finance, with scalable custody and liquidity solutions.
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