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Standard Chartered launches custody for Ripple's RLUSD stablecoin

Bank joins planned collateral integration with Ripple and LMAX Group

By LineZotpaper
Published
Read Time2 min
Standard Chartered has launched custody services for Ripple's RLUSD stablecoin at its Dubai International Financial Center branch, part of a broader plan to allow institutional clients to use the token as collateral for trading without transferring the underlying assets.

The bank announced on October 12 that eligible institutional clients can now hold RLUSD issued on the XRP Ledger through the Dubai branch, which is regulated by the Dubai Financial Services Authority. The custody launch is the first phase of a three-party arrangement with Ripple and trading platform LMAX Group. Under the proposed model, Standard Chartered would mirror the value of eligible RLUSD holdings to LMAX, enabling clients to support trading positions without moving the tokens directly to the exchange. The arrangement aims to reduce counterparty exposure and operational risks associated with transferring assets between custodians and venues.

The development comes as RLUSD has seen rapid growth. According to data from the RWA Foundation, the stablecoin added $765.3 million to its market capitalisation during the third quarter, the second-largest increase among stablecoins after Circle's USDC, which added $915 million. United Stables ranked third with $474.2 million.

Data from DeFiLlama shows RLUSD's total circulating supply has climbed to approximately $2.4 billion, with about $1.14 billion issued on the XRP Ledger and $1.3 billion on Ethereum.

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Analysis

Why This Matters

  • The move signals growing acceptance of stablecoins by traditional banks for custody and collateral, potentially easing institutional entry into crypto markets.
  • If the three-party collateral model proves successful, it could set a template for banks to support crypto trading without requiring clients to transfer tokens to exchanges.
  • RLUSD's rapid supply growth and bank backing may increase competition among regulated stablecoins, particularly with Circle's USDC.

Background

Standard Chartered is a London-headquartered international bank with operations across Asia, Africa, and the Middle East. Ripple's RLUSD is a US dollar-pegged stablecoin launched on the XRP Ledger and Ethereum. The Dubai International Financial Center is a financial free zone that operates under its own regulatory framework, the Dubai Financial Services Authority. Custody arrangements for digital assets have become a key area of focus for banks seeking to serve institutional crypto clients.

Key Perspectives

Standard Chartered: Expanding its digital asset custody offerings to meet institutional demand for secure, regulated stablecoin services, with plans to integrate RLUSD as collateral for trading. Ripple and RLUSD holders: Bank custody adds credibility and utility to the stablecoin, potentially driving further adoption and liquidity. Critics: Regulatory uncertainty around stablecoins persists, and the success of the collateral arrangement depends on market demand and operational execution. Some may question whether custody alone is sufficient to mitigate counterparty risks.

What to Watch

  • Adoption among institutional clients using RLUSD as collateral on LMAX.
  • Regulatory responses from other jurisdictions to similar bank-crypto custody models.
  • RLUSD's market capitalisation trajectory and whether it can sustain its growth rate to challenge established stablecoins.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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