Standard Chartered on Tuesday unveiled a new custodial framework enabling institutional clients on OKX to use BlackRock’s tokenised short-term U.S. Treasury fund as collateral for trading.
The arrangement is the result of a partnership between Standard Chartered, asset manager BlackRock and crypto trading venue OKX. It permits OKX Middle East's VIP and institutional customers to post the BlackRock USD Institutional Digital Liquidity Fund - often referenced by its acronym BUIDL - as collateral for trading activities conducted on the platform.
Under the terms described by the three firms, Standard Chartered will perform the custodian role for this off-exchange collateral arrangement. The companies characterized the setup as the first framework of its kind to be backed by a globally systemically important bank.
According to the announcement, the structure aims to reduce the operational requirement for clients to repeatedly transfer assets between an independent custodian and a trading venue. At the same time, the firms said, protections for assets remain in place outside the exchange rather than being held solely on the trading venue.
BlackRock's tokenised short-term Treasury vehicle that will be used as collateral invests in cash, U.S. Treasury bills and repurchase agreements, and distributes yield on-chain.
Contextual note - The firms say the framework specifically applies to VIP and institutional customers on OKX Middle East and involves an off-exchange custodial arrangement rather than an on-exchange custody of collateral.
The announcement highlights a cross-industry effort to connect traditional custody and short-term U.S. Treasury exposure with tokenised trading platforms while keeping certain protections outside the exchange environment.
Details provided in the firms' description emphasize operational design points: use of the BUIDL fund as eligible collateral, Standard Chartered's custody role, application to defined OKX client cohorts, and the fund's underlying investments and on-chain yield distribution.