DBS, Franklin, and Ripple Introduce Tokenized Lending on the XRP Ledger

DBS, Franklin Templeton, and Ripple have teamed up to offer tokenized trading and lending services for institutional investors, utilizing the XRP Ledger and powered by tokenized money market funds and stablecoins.

The trio has signed a memorandum of understanding (MOU) to aid investors in navigating market volatility by providing a mechanism to transfer funds between stablecoins and yield-generating assets, as stated in a Thursday announcement.

“Digital asset investors require solutions that cater to the distinct needs of a borderless 24/7 asset class,” remarked Lim Wee Kian, CEO of DBS Digital Exchange. “This collaboration illustrates how tokenized securities can fulfill that role while enhancing efficiency and liquidity in global financial markets,” Kian added.

DBS Digital Exchange (DDEx) will list sgBENJI, a tokenized version of Franklin Templeton’s US Dollar Short-Term Money Market Fund, alongside Ripple USD (RLUSD). This arrangement will enable clients to trade between RLUSD and sgBENJI at their convenience, allowing for quick portfolio rebalancing and yield earnings during uncertain market conditions.

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DBS to accept tokenized funds as lending collateral

In the next stage, DBS intends to allow clients to use sgBENJI as collateral for accessing credit, either via repurchase agreements with the bank or through third-party lending platforms, with DBS serving as the collateral agent.

Franklin Templeton will issue sgBENJI on the XRP Ledger, selected for its low fees and rapid settlement capabilities.

Ripple’s Nigel Khakoo described the initiative as a “game-changer,” emphasizing that investors can transition between a stablecoin and a tokenized fund within a “single, trusted ecosystem, unlocking real-world capital efficiency, utility, and liquidity that institutions seek.”

This initiative addresses the rising demand from institutions for regulated, on-chain products. As reported in a recent Coinbase and EY-Parthenon survey, 87% of institutional investors plan to invest in digital assets by 2025.

Cointelegraph reached out to DBS and Franklin Templeton for comment but had not received a response by the time of publication.

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Tokenized cross-border settlements

DBS, Franklin Templeton, and Ripple’s initiative to launch tokenized lending comes as tokenized assets gain traction in global capital markets.

As Cointelegraph previously reported, SBI Shinsei Bank has partnered with Singapore’s Partior and Japan’s DeCurret DCP to explore multicurrency tokenized deposits for cross-border transactions. The trio has signed an MOU to develop a blockchain-based framework enabling real-time clearing across multiple currencies.