The arrangement, announced this week in Singapore, is an example of the continued "mainstreaming" of digital assets and their use in the wealth management sector.

DBS, Franklin Templeton and digital assets business Ripple are partnering to provide accredited and institutional investors with trading and lending solutions, powered by tokenised money market funds.

The firms have signed a memorandum of understanding to launch the solutions, Franklin Templeton said in a statement yesterday.

The partnership is designed to reduce investors’ exposure to cryptocurrencies’ volatility.

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– alongside RLUSD – a stablecoin issued by Ripple. (Stablecoins are cryptocurrencies that are to an underlying entity, such as gold or a fiat currency such as the dollar.) Eligible DBS clients can trade RLUSD for sgBENJI tokens, enabling them to rebalance their portfolios into a relatively stable asset around the clock, while earning yield when markets are volatile.

The firms said the partnership shows how mature the digital assets sector is becoming. They cited research from EY-Parthenon and Coinbase showing that 87 per cent of institutional investors expect to make investments into digital assets this year. (This publication has been covering how wealth management is pushing deeper into the area. See here, for example.)

DBS said that in the next phase of the arrangement, the Singapore-headquartered bank will explore helping clients unlock liquidity by using their sgBENJI tokens as collateral. 

Clients can potentially use such entities to get credit from a bank via a repurchase transaction (repo) or from third-party platforms where DBS will act as an agent holding the collateral. 
Franklin Templeton will tokenise sgBENJI on the XRP Ledger – a public and enterprise-grade blockchain. 

“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,” Lim Wee Kian, CEO of DBS Digital Exchange, said. “Having been active in Asia’s blockchain ecosystem since 2021, this initiative strengthens our leadership position and represents a new front in DBS’ mission to provide our clients with trusted, institutional-grade solutions to build their digital asset portfolios.”
 

Left to right: Rimy Gui, head of securities services, global transaction services, DBS; Evy Theunis, head of digital assets, institutional banking group, DBS; Lim Wee Kian, CEO, DBS Digital Exchange; Chetan Karkhanis, senior vice president, strategic ventures, Franklin Templeton; Nigel Khakoo, VP and global head of trading and markets, Ripple; Fiona Murray, managing director, APAC, Ripple.