Standard Chartered has introduced custody services for Ripple’s RLUSD stablecoin in anticipation of broadening its application as trading collateral for institutions.
The bank revealed on Oct. 12 that qualified institutional customers are now able to store RLUSD minted on the XRP Ledger (XRPL) via its Dubai International Financial Center office, which operates under the regulation of the Dubai Financial Services Authority.
This rollout is a component of a wider collaboration involving Ripple and trading firm LMAX, designed to let institutions utilize RLUSD as collateral while retaining their stablecoin balances at Standard Chartered.
Within this envisioned framework, the financial institution would reflect the valuation of qualifying RLUSD balances to LMAX, permitting customers to back trading positions without needing to transfer the underlying tokens straight to the platform.
Such a setup is intended to minimize counterparty exposure and operational hazards tied to transferring assets between exchanges and custodians, while giving institutions the ability to allocate capital across various trading operations.
Ripple expands RLUSD’s institutional reach after rapid supply growth
This milestone arrives as RLUSD establishes itself as one of the fastest-scaling stablecoins based on net market value gained, highlighting Ripple’s drive to broaden its footprint in financial markets.
Figures from the RWA Foundation indicate that Ripple achieved the second-highest growth in stablecoin market cap throughout the third quarter, pulling in $765.3 million across a 90-day span.
Circle’s USDC was the only asset to record a higher gain at $915 million, whereas United Stables took third place with $474.2 million.
Metrics provided by DeFiLlama indicate that the aggregate circulating supply of RLUSD has subsequently risen to roughly $2.4 billion, with near $1.14 billion minted on the XRPL and an additional $1.3 billion deployed on Ethereum.
This expansion supplies Ripple with a bigger inventory of dollar-pegged tokens as the company aims to push RLUSD past basic transfers and payments, establishing it as collateral for institutional trading.
That push gained traction back in January when Ripple and LMAX unveiled a multiyear alliance to weave RLUSD throughout the trading firm’s ecosystem.
Ripple provided $150 million in funding to back LMAX’s growth, with the pact focusing on driving RLUSD usage across spot crypto trading, perpetual futures, contracts for difference, and other products tailored for institutions.
The participation of Standard Chartered introduces a conventional banking custody pathway to the partnership, letting participating institutions keep their custody setups with the bank while engaging with LMAX trading services.
Waqar Chaudry, who serves as Standard Chartered’s global head of digital assets within Securities Services, noted that institutional investors display a growing desire to enter digital asset spaces without sacrificing proper risk management and asset protection.
For Ripple, getting RLUSD accepted as trading collateral has the potential to spur extra demand coming from investment firms, brokers, and banks that require dollar-denominated holdings to back their positions.
Even so, the ultimate commercial outcome will hinge on the extent of institutional adoption and the specific LMAX offerings that eventually choose to accept the stablecoin.
Standard Chartered has refrained from disclosing the total volume of RLUSD kept in storage or naming any of the participating institutional clients.
Furthermore, the firms have yet to disclose a launch date for the collateral integration. The rollout continues to depend on final paperwork, system testing, regulatory compliance, and internal clearances across the relevant territories.
These pending procedures will dictate the timeline for when institutions can begin leveraging RLUSD stored at Standard Chartered to support their trading activity on LMAX.