- Standard Chartered now holds Ripple RLUSD for institutions via its Dubai branch.
- RLUSD use as collateral on LMAX is planned and still needs testing and approvals.
- The planned collateral model keeps tokens at the bank, while LMAX credits value.
Standard Chartered announced that eligible institutional clients can now keep RLUSD, issued on the XRP Ledger, in its digital asset custody. The service runs through the bank’s branch in the Dubai International Financial Centre, which is regulated by the Dubai Financial Services Authority.
In simple terms, large investors can now store this stablecoin with a global bank instead of an exchange or a crypto-only custodian. Custody is live, and the next planned step is to let clients use RLUSD as collateral on the LMAX Group trading platform. However, the bank said it still needs final documentation, testing, and regulatory approvals.
How the Planned Collateral Model Works
Standard Chartered calls it collateral mirroring. The RLUSD stays in the bank’s custody, and LMAX credits the client with its value without receiving the tokens. The companies say this should reduce transfer-related operational risk, lower counterparty exposure, and improve capital efficiency.
Could Bank-Held Collateral Catch On?
The appeal starts with a common headache. A firm that wants to trade usually has to post margin at the venue, pulling assets away from the custodian that safeguards them. Mirroring would let the same RLUSD stay under the bank’s safekeeping while still backing the firm’s positions.
For compliance teams, the model could simplify collateral management by keeping assets with a bank custodian while allowing their value to support trading positions. This could reduce the need for repeated transfers and associated operational risks. However, the benefits will depend on how the bank and trading venue coordinate collateral records, verify available balances, and respond to margin calls.
Timing may help. The US GENIUS Act and the EU’s MiCA rules have set clearer terms for stablecoins and for custody, and other large banks are building their own digital asset custody services.
Standard Chartered has already introduced a collateral-mirroring programme with OKX, while its planned RLUSD arrangement with LMAX Group would extend the model to another trading venue. The LMAX service is not yet live and remains subject to documentation, testing, and regulatory approvals. Its effectiveness will depend on how reliably the system works in practice, particularly during volatile market conditions and when trading positions require additional collateral.
Related: Ripple Expands Leveraged ETF Financing With Brevan Howard Deal
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