DBS, Franklin Templeton and Ripple have signed a memorandum of understanding (MOU) to launch trading and lending solutions powered by tokenised money market funds on the XRP ledger blockchain and Ripple’s stablecoin, Ripple USD (RLUSD).
The partnership comes amid growing interest in the digital asset class, with some 87% of institutional investors expecting to make investments into digital assets by 2025, says the joint release, referring to an EY-Parthenon and Coinbase report.
Under the MOU, DBS Digital Exchange (DDEx) will list sgBENJI, the token of Franklin Templeton’s tokenised money market fund, Franklin onchain US dollar short-term money market fund. Listed alongside RLUSD, sgBENJI will allow eligible DBS clients to trade RLUSD for sgBENJI tokens. This will enable them to rebalance their portfolios into a relatively stable asset 24/7 while earning yield during periods of volatility.
At the same time, Franklin Templeton will tokenise sgBENJI on the XRP ledger, chosen for its speed, efficiency and low transaction costs, and to enable greater interoperability across blockchain networks.
“Digital asset investors need solutions that can meet the unique demands of a borderless 24/7 asset class. This partnership demonstrates how tokenised securities can play that role while injecting greater efficiency and liquidity in global financial markets,” says Lim Wee Kian, CEO of DDEx. “Having been active in Asia’s blockchain ecosystem since 2021, this initiative strengthens our leadership position and represents a new front in DBS’s mission to provide our clients with trusted, institutional-grade solutions to build their digital asset portfolios.”
Roger Bayston, head of digital assets at Franklin Templeton, says blockchain and tokenisation may unlock power new use cases that have the “potential to reshape the global financial ecosystem”, while Nigel Khakoo, vice president and global head of trading and markets at Ripple, noted that the collaboration between the three parties to enable repurchase transaction trades for a tokenised money market fund is a “game-changer”.
See also: OCBC establishes US$1 bil tokenised USCP to strengthen USD liquidity resilience
In the next phase of the partnership, DBS will look at helping its clients unlock liquidity by using their sgBENJI tokens as collateral. Potential use cases include obtaining credit either from the bank via a repurchase transaction or from third-party platforms where DBS will act as an agent holding the collateral.
