Standard Chartered starts holding Ripple's RLUSD stablecoin for institutions in Dubai, and plans to let it back trades at LMAX without leaving the bank

Standard Chartered has started holding Ripple's dollar stablecoin for institutional clients. The bank's branch in the Dubai International Financial Centre, which is regulated by the Dubai Financial Services Authority, now supports custody of Ripple USD, known as RLUSD, Ripple said in a statement on Monday.

The second part of the deal is still a plan. Standard Chartered intends to extend its "collateral mirroring" model to LMAX Group, a trading and exchange group. Under that model, the value of RLUSD held at the bank would count as collateral for agreed LMAX products, without the tokens being sent to the trading venue. The three companies say that should cut the operational risk of moving collateral around and use capital more efficiently.

"RLUSD was built for exactly this kind of institutional use case," said Jack McDonald, Ripple's senior vice president for stablecoins.

Why it matters: big banks have been wary of leaving assets on crypto venues after past exchange failures. Keeping the stablecoin at a bank while it backs trades elsewhere is one answer to that.

The release gives no launch date for the LMAX link and says the capabilities remain subject to final documentation, successful testing, laws and regulations, internal approvals and readiness in each jurisdiction.