Key Points

• Standard Chartered Bank launches institutional-level RLUSD custody on XRP Ledger.
• Ripple and LMAX collaborate for $1.5 billion to promote the adoption of institutional stablecoins
• The planned collateral integration can support transactions without transferring RLUSD.

The RLUSD stablecoin of Ripple has received support from Standard Chartered Bank. On October 12, Standard Chartered Bank launched an institutional custody service on XRP Ledger, advancing the plan to integrate this token into the LMAX Group trading infrastructure.

This progress is built upon the $150 million financing agreement announced by Ripple and LMAX in January. The three companies are currently working towards a system that allows financial institutions to use RLUSD as collateral for transactions, without the need to transfer the tokens directly to exchanges.

According to a statement from Standard Chartered Bank, the custody service has been put into operation, while the additional collateral function still requires further testing and approval.

Standard Chartered Bank launched RLUSD custody on XRP Ledger.

Standard Chartered Bank provides RLUSD custody services through its branch located in the Dubai International Financial Centre, which is regulated by the Dubai Financial Services Authority.

Eligible institutional clients can now hold RLUSD issued on XRP Ledger within the existing digital asset custody infrastructure of this bank. This service has enabled a globally renowned bank to enter the continuously expanding stablecoin ecosystem of Ripple.

More importantly, it is about how institutions can use these holdings in the future.

According to the proposed collateral mirroring arrangement, Standard Chartered Bank will report the value of eligible RLUSD holdings to LMAX, thereby allowing customers to provide collateral for agreed-upon trading products without transferring the underlying tokens to a trading venue.

For example, an institution that holds $10 million RLUSD with Standard Chartered Bank may be able to use its eligible holdings to support its trading positions in LMAX while maintaining bank custody. The actual amount that can be recognized will depend on the future contract terms and risk requirements.

The $150 million collaboration between Ripple and LMAX enters a new phase

Ripple announced a partnership with LMAX on January 15th, pledging to provide $150 million in financing to support the long-term expansion of this trading group.

The protocol envisages RLUSD to be used as collateral and settlement currency for spot cryptocurrency trading, perpetual futures, and difference contracts.

Today's announcement added another component: custody through Standard Chartered Bank, as well as a proposed mechanism that will connect the bank's holdings of RLUSD with LMAX in the market.

This distinction is very important because institutions typically separate asset custody from transaction execution in order to manage operational risks and counterparty risks.

These companies have not yet announced when the collateral integration will be launched. Implementation still depends on the final documents, testing, regulatory requirements, and internal approvals.

Marcus Hale Written by

Marcus Hale is a cryptocurrency and financial markets contributor who reports on Bitcoin, Ethereum, digital assets, regulation, ETF, and institutional adoption. His work focuses on developments that may impact the market, investor trends, and the broader forces that shape the crypto economy.