Standard Chartered launches custody for Ripple's RLUSD, plans LMAX collateral link

Standard Chartered said on Oct. 12 that it now supports institutional custody of Ripple USD (RLUSD), Ripple's dollar stablecoin, issued on the XRP Ledger (XRPL). The service is offered through the British bank's branch in the Dubai International Financial Centre (DIFC), which is regulated by the Dubai Financial Services Authority (DFSA).

The bank said it is also working with Ripple and LMAX Group, which operates foreign-exchange and digital asset trading venues, to make RLUSD eligible collateral for LMAX products. That part is still at the planning stage.

The coins stay at the bank, only their collateral value moves

The plan rests on what Standard Chartered calls collateral mirroring. A client's RLUSD stays in the bank's custody account instead of being sent to the exchange, and only the value of that collateral is mirrored to LMAX Group. Unlike the usual practice of moving coins to an exchange wallet before trading, the assets remain with the bank.

The bank said the arrangement would give institutional clients greater flexibility in how they hold and deploy digital assets for trading, reducing transfer-related operational risk and counterparty exposure and improving capital efficiency. The three companies aim to make RLUSD eligible collateral for agreed LMAX Group products across trading and collateral management.

No launch date has been set. The bank said the planned capabilities remain subject to final documentation, successful testing, applicable laws and regulations, internal approvals and jurisdictional readiness, and that further details will be announced as implementation progresses.

Ripple: "RLUSD was built for exactly this"

"RLUSD was built for exactly this kind of institutional use case."

Jack McDonald, SVP, Stablecoins, Ripple

McDonald said customers want the efficiency of a regulated stablecoin without giving up the custody standards they already trust. Waqar Chaudry, Standard Chartered's global head of digital assets, said: "Institutional clients want to participate in digital asset markets without compromising on how their assets are safeguarded or how risk is managed." Luke Dorney, head of custody for digital assets at LMAX Group, said "RLUSD is an increasingly important component of institutional digital asset markets," adding that LMAX had agreed to adopt Standard Chartered's collateral mirroring model.

LMAX custody in September, Singapore last week

This is not the first tie-up between Standard Chartered and LMAX Group. On Sept. 16, the bank announced it had been appointed LMAX Group's digital asset custodian through its DIFC branch and Standard Chartered Luxembourg. LMAX Group became the first client on the Luxembourg custody platform, which received authorisation under the EU's Markets in Crypto-Assets (MiCA) regulation in June. In July, the two firms executed the industry's first live digital asset prime brokerage trades, combining the bank's credit and custody capabilities with LMAX's trading infrastructure, and they have also been exploring off-exchange custody that lets clients trade while their assets stay with the bank.

On Oct. 8, the bank said its Singapore unit plans to offer custody of selected cryptoassets, stablecoins and tokenised real-world assets to institutional clients and accredited investor corporate clients. The bank said it already provides digital asset custody in the UAE, Luxembourg and Hong Kong.

RLUSD at 1,345 won, XRP at 1,866 won on Upbit

RLUSD is a dollar-pegged stablecoin issued by Ripple, with a market capitalization of about $2.44 billion on the night of Oct. 12, according to CoinGecko. In South Korea it trades on the Korean won markets of Upbit and Bithumb. At 10:25 p.m. KST on Oct. 12, RLUSD traded at 1,345 won on Upbit; around the same time, Tether (USDT) was at 1,348 won on Upbit and RLUSD at 1,348 won on Bithumb. Upbit's 24-hour RLUSD turnover was about 61 million won.

XRP, the native coin of the XRP Ledger on which RLUSD is issued, traded at 1,866 won on Upbit at 10:32 p.m. KST, 2.3% below its 9 a.m. opening price of 1,909 won. On Binance it was at $1.383, down about 1% from 24 hours earlier.