DBS, Franklin Templeton, and Ripple have teamed up to offer tokenized trading and lending services designed for institutional investors, utilizing the XRP Ledger and supported by tokenized money market funds and stablecoins.
The collaboration formalized through a memorandum of understanding (MOU) aims to assist investors in navigating market volatility by facilitating transfers between stablecoins and yield-generating assets, according to a Thursday announcement.
“Digital asset investors require solutions that address the specific needs of a global 24/7 asset class,” remarked Lim Wee Kian, CEO of DBS Digital Exchange. “This collaboration illustrates how tokenized securities can fulfill that need while enhancing efficiency and liquidity in worldwide financial markets,” Kian added.
DBS Digital Exchange (DDEx) will introduce sgBENJI, a tokenized iteration of Franklin Templeton’s US Dollar Short-Term Money Market Fund, alongside Ripple USD (RLUSD). This configuration will enable clients to trade RLUSD and sgBENJI at any point, allowing for rapid portfolio rebalancing and yield earning during uncertain market conditions.
Related: Bitwise files for stablecoin, tokenization ETF with US SEC
DBS to utilize tokenized funds as lending collateral
In the subsequent phase, DBS intends to allow clients to employ sgBENJI as collateral to access credit, whether through repurchase agreements with the bank or third-party lending platforms, with DBS serving as the collateral agent.
Franklin Templeton will issue sgBENJI on the XRP Ledger, recognized for its low fees and rapid settlement capabilities.
Ripple’s Nigel Khakoo labeled the initiative a “game-changer,” emphasizing that investors can seamlessly transition between a stablecoin and a tokenized fund within a “single, trusted ecosystem, unlocking capital efficiency, utility, and liquidity that institutions seek.”
This initiative addresses the increasing demand from institutions for regulated, on-chain products. According to a recent survey by Coinbase and EY-Parthenon, 87% of institutional investors anticipate allocating funds to digital assets by 2025.
Cointelegraph reached out to DBS and Franklin Templeton for comments but had not received a reply by the time of publication.
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Tokenized cross-border transactions
The initiative from DBS, Franklin Templeton, and Ripple to launch tokenized lending corresponds with the increasing integration of tokenized assets in global capital markets.
As reported by Cointelegraph, SBI Shinsei Bank has allied with Singapore’s Partior and Japan’s DeCurret DCP to examine multicurrency tokenized deposits for cross-border transactions. The trio established an MOU to create a blockchain framework enabling real-time clearing across multiple currencies.
The objective is to establish a 24/7 global settlement network to diminish the dependency on traditional correspondent banking.
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