DBS, Franklin Templeton, and Ripple are collaborating to introduce tokenized trading and lending services aimed at institutional investors, leveraging the capabilities of the XRP Ledger and incorporating tokenized money market funds and stablecoins. This initiative is part of a memorandum of understanding (MOU) signed by the three parties, aimed at allowing investors to navigate market volatility more effectively by facilitating the movement of funds between stablecoins and yield-generating assets.
Lim Wee Kian, CEO of DBS Digital Exchange, emphasized that digital asset investors require solutions tailored to the unique characteristics of an around-the-clock, borderless asset class. He highlighted this partnership as a demonstration of how tokenized securities can enhance efficiency and liquidity within global financial markets. As part of this endeavor, DBS Digital Exchange (DDEx) is set to launch sgBENJI, a tokenized form of Franklin Templeton’s US Dollar Short-Term Money Market Fund, alongside Ripple USD (RLUSD). This structure will enable clients to trade seamlessly between RLUSD and sgBENJI, aiding in quick portfolio rebalancing while optimizing yield during periods of market uncertainty.
In a forthcoming phase, DBS intends to allow clients to utilize sgBENJI as collateral to access credit. This will be facilitated through repurchase agreements with DBS or through third-party lending platforms, designating DBS as the collateral agent. Franklin Templeton will be responsible for issuing sgBENJI on the XRP Ledger, which was selected for its competitive transaction costs and rapid settlement times.
Ripple’s Nigel Khakoo referred to this initiative as a potential “game-changer,” highlighting the benefits for investors who can shift between stablecoins and tokenized funds within a unified and trusted ecosystem. This advancement addresses the increasing institutional demand for regulated on-chain products, underscored by a recent survey from Coinbase and EY-Parthenon indicating that 87% of institutional investors plan to allocate resources to digital assets by 2025.
The move towards tokenized lending and trading coincides with a broader trend of increasing acceptance and implementation of tokenized assets in global capital markets. Recently, SBI Shinsei Bank partnered with Partior of Singapore and Japan’s DeCurret DCP to explore multicurrency tokenized deposits aimed at facilitating cross-border settlements. This partnership aims to develop a blockchain-based framework that enables real-time clearing among various currencies, with the overarching goal of constructing a 24/7 global settlement network that reduces dependence on traditional correspondent banking systems.
