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

DBS, Franklin Templeton, and Ripple have collaborated to introduce tokenized trading and lending services targeted at institutional investors, utilizing the XRP Ledger and bolstered by tokenized money market funds and stablecoins.

The trio entered into a memorandum of understanding (MOU) aimed at assisting investors in better managing market volatility by facilitating the transfer of funds between stablecoins and yield-generating assets, as stated in a Thursday announcement.

“Digital asset investors require solutions tailored to the unique challenges of a borderless, 24/7 asset class,” remarked Lim Wee Kian, CEO of DBS Digital Exchange. “This collaboration showcases how tokenized securities can fulfill that need while enhancing efficiency and liquidity in global financial markets,” Kian continued.

DBS Digital Exchange (DDEx) is set to list sgBENJI, a tokenized representation of Franklin Templeton’s US Dollar Short-Term Money Market Fund, alongside Ripple USD (RLUSD). This structure will enable clients to trade between RLUSD and sgBENJI at any moment, assisting them in swiftly rebalancing portfolios and generating yields during tumultuous market conditions.

Related: Bitwise files for stablecoin, tokenization ETF with US SEC

DBS to utilize tokenized funds as collateral for lending

In the upcoming phase, DBS intends to allow clients to leverage sgBENJI as collateral for credit access, either via repurchase agreements with the bank or third-party lending platforms, with DBS taking on the role of collateral agent.

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

Ripple’s Nigel Khakoo referred to the initiative as a “game-changer,” highlighting 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 strategy responds to a rising demand from institutions for regulated, onchain products. According to a recent survey conducted 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 feedback, but had not received a response by the time of publication.

Related: RWA tokens surge 11% weekly as onchain value peaks at $29B

Tokenized cross-border settlements

The initiative from DBS, Franklin Templeton, and Ripple to launch tokenized lending coincides with the increasing traction of tokenized assets in global capital markets.

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