Standard Chartered Partners with OKX to Launch Innovative Collateral Mirroring Program for Enhanced Crypto Trading
The recent collaboration between Standard Chartered and OKX is set to enhance security and capital efficiency for institutional clients in the digital asset space. By utilizing a Globally Systemically Important Bank (G-SIB) as the custodian for collateral, this innovative program aims to address significant concerns related to counterparty risk in today’s volatile digital asset markets.
Introduction of Collateral Mirroring Capability
The new collateral mirroring capability has been launched as a pilot program within the regulatory framework of the Dubai Virtual Asset Regulatory Authority (VARA). This initiative promises clients increased protection against potential risks, ensuring a safer environment for digital transactions.
Roles of Standard Chartered and OKX
- Standard Chartered: Acts as the independent and regulated custodian, ensuring the secure storage of assets utilized as collateral.
- OKX: Manages collateral and facilitates transactions through its VARA-regulated entity.
Expert Insights on Custody Solutions
Margaret Harwood-Jones, the Global Head of Financing and Securities Services at Standard Chartered, emphasizes the importance of secure custody solutions in the evolving digital asset landscape. She states, “Our collaboration with OKX to enable the use of cryptocurrencies and tokenized money market funds as collateral represents a significant step forward in providing institutional clients with the confidence and efficiency they need.”
Commitment to Security and Compliance
By leveraging their established custody infrastructure, Standard Chartered is committed to maintaining the highest standards of security and regulatory compliance. This commitment is essential in fostering greater trust within the digital asset ecosystem.
Launch of Money Market Funds
Franklin Templeton is set to be the first of several money market funds offered under the OKX-SCB program. The alternative asset manager, Brevan Howard, is also among the first to onboard this innovative program.
Industry Leadership and Future Prospects
Hong Fang, President of OKX, asserts that this partnership creates an industry standard for current and prospective institutional clients. He states, “By leveraging Standard Chartered’s position as a top custodian globally, as well as OKX’s market leadership in cryptocurrency trading, the partnership sets an industry standard for deploying trading capital at scale in a trusted environment.”
Recent Challenges Faced by OKX
Earlier this year, OKX’s operator, Aux Cayes Fintech, faced significant challenges, including $504 million in fines and fees for violating US anti-money laundering laws. This incident highlights the ongoing regulatory scrutiny in the digital asset sector, making robust compliance measures more crucial than ever.
For further insights into cryptocurrency regulations and compliance, consider exploring resources from Financial Times and BBC News.
