Standard Chartered said in its announcement that custody for RLUSD is now live through its Dubai International Financial Centre branch, which is regulated by the Dubai Financial Services Authority. The service supports RLUSD issued on the XRP Ledger.
The arrangement is designed to address a practical barrier in institutional digital asset markets: how firms can use tokens as trading collateral without moving them away from a regulated custodian. Under the planned structure, Standard Chartered would hold clients’ RLUSD while LMAX would recognize the assets for collateral purposes on its institutional trading infrastructure.
That connection is not yet operational. Standard Chartered said the proposed collateral-mirroring arrangement remains dependent on documentation, testing, regulatory requirements and internal approvals. The bank did not provide a timetable for when the link could go live.
Separating custody from execution
The proposed model would separate two functions that are often combined in digital asset markets. Standard Chartered would be responsible for safeguarding the stablecoins, while LMAX would use their value to support client trading activity. In practice, an institution could retain custody of RLUSD at a bank instead of transferring collateral directly to a trading venue.
“Luke Dorney, Head of Custody, Digital Assets, LMAX Group, said:”
That distinction could matter to banks, funds and other professional investors with strict rules around asset segregation, counterparty exposure and operational controls. Keeping collateral with a regulated bank may also make it easier for institutions to fit stablecoin trading into existing risk and treasury frameworks.
The idea is closely linked to a broader partnership between Ripple and LMAX. In a January announcement, LMAX Group and Ripple said they planned to integrate RLUSD as collateral and a settlement currency across LMAX’s institutional trading infrastructure. Ripple also agreed to provide $150 million in financing as part of that initiative.
CoinDesk reported that the Standard Chartered custody service and proposed LMAX connection would give institutional clients a way to use RLUSD without placing the tokens directly on the trading platform. The arrangement would extend RLUSD’s potential role beyond payments and settlement, positioning it as part of the infrastructure used to support trading.
A test for stablecoin infrastructure
Stablecoin adoption among professional investors depends on more than issuance, liquidity and a reliable peg. Institutions also need custody arrangements, clear legal treatment, risk controls and efficient ways to mobilize collateral. The proposed Standard Chartered and LMAX structure targets that infrastructure layer.
The model could reduce operational friction if clients do not have to repeatedly transfer stablecoins between a bank and a venue. It could also address a concern that arises when institutions must choose between keeping assets with a trusted custodian and making those assets available for trading.
However, the arrangement still faces several execution hurdles. Documentation must be completed, the technology must be tested, and the parties must satisfy regulatory and internal approval processes. Until those steps are finished, the collateral connection remains a plan rather than a live capability.
The expansion also adds to Standard Chartered’s digital asset custody business across financial centers. For Ripple, it offers another route to place RLUSD inside institutional market infrastructure, where stablecoins can function as operational assets rather than simply transaction instruments.
The supplied sources present support for the arrangement but no opposing view. LMAX custody head Luke Dorney said the model would give clients greater flexibility in holding and deploying RLUSD while supporting institutional custody and risk management standards.
The next measure of progress will be whether the planned connection becomes operational and whether other venues accept bank-held stablecoins as collateral. If it does, RLUSD could provide a test case for a wider model in which regulated custody, blockchain settlement and institutional execution operate as connected but separate services.
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