Standard Chartered Bank Launches RLUSD Custody Service for Institutional Investors

Responding to RLUSD Custody Under Dubai Regulations, Plans for Collateral Collaboration with LMAX

Standard Chartered Bank has announced the launch of a custody service for institutional investors for the RLUSD (Ripple USD), a stablecoin linked to Ripple.

The service will comply with asset custody regulations in Dubai and is also working on introducing a new mechanism to utilize RLUSD as trading collateral. This service will be provided through the bank's DIFC (Dubai International Financial Centre) branch, which is regulated by the DFSA (Dubai Financial Services Authority), allowing eligible institutional investors to hold and manage RLUSD issued on the XRPL (XRP Ledger) using the bank's digital asset custody infrastructure.

RLUSD is designed to maintain a value of one dollar, backed by assets such as US dollars, US Treasury securities, and cash equivalents. Ripple began issuing RLUSD on the XRPL and Ethereum in December 2024, with this service targeting the XRPL version.

Standard Chartered Bank has been developing its cryptocurrency custody business in Dubai since September 2024, initially supporting Bitcoin (BTC) and Ethereum (ETH). With the addition of RLUSD, the existing custody services will expand to include stablecoins.

Waqar Chaudry, the bank's head of digital assets, explained that institutional investors are seeking to participate in the digital asset market while maintaining their asset protection and risk management methods. He emphasized the importance of balancing regulatory custody systems with trading opportunities.

Expanding the Use of RLUSD through Collateral Mirroring Plans with LMAX

Standard Chartered Bank is also planning to collaborate with Ripple and LMAX Group to utilize RLUSD as collateral for institutional trading.

The aim is to implement a system called the Collateral Mirroring Framework, which allows customers to use the value of RLUSD as collateral on LMAX's trading platform while keeping it stored with the bank. This system mitigates operational risks associated with asset movement, as there is no need to transfer the tokens to the exchange.

LMAX plans to recognize RLUSD as eligible collateral for agreed trading products and collateral management services, aiming to create an environment where institutional investors can participate in trading while maintaining their existing custody arrangements.

This initiative follows a multi-year partnership announced by Ripple and LMAX in January 2026, where Ripple agreed to provide $150 million (approximately 23.7 billion yen) to support LMAX's business and indicated plans to use RLUSD as collateral, margin, and settlement currency. With Standard Chartered Bank joining as the custody institution, a mechanism will be established to utilize collateral without transferring assets to the exchange.

However, the collateral mirroring with LMAX is not yet operational and requires final contract documentation, technical testing, and approvals from regulatory authorities and internal stakeholders. The specific start date for the service has not been disclosed.