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Cryptocurrency exchange OKX has joined forces with Sydney-based crypto fund JellyC, alongside financial giants Franklin Templeton and Standard Chartered, to enhance the safety and efficiency of institutional crypto trading in Australia. This strategic partnership aims to mitigate risks for institutions looking to invest in digital assets.
Key Takeaways
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JellyC will leverage both cryptocurrencies and Franklin Templeton’s Tokenised Money Market Fund (TMMF) as off-exchange collateral for trading on OKX.
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Standard Chartered will provide custody services for the collateral, ensuring regulatory compliance and security.
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The initiative is expected to facilitate meaningful, compliant crypto strategies for Australian pension funds, asset managers, and family offices.
The OKX-JellyC Collateral Agreement
The core of this collaboration lies in a tripartite collateral agreement. JellyC will utilize cryptocurrencies and Franklin Templeton’s TMMF as collateral for its trading activities on OKX. The TMMF, backed by money-market instruments and minted on public blockchains, allows institutions to convert cash holdings into on-chain tokens.
Standard Chartered's role is crucial, as it will hold the collateral in custody, adhering to strict regulatory frameworks and security protocols. This setup ensures that when JellyC locks up its crypto and TMMF tokens, OKX is notified on-chain, confirming the collateral is in place.
Enabling Enhanced Trading Power
With the collateral secured, JellyC and other approved institutions can access increased trading power on OKX. This allows them to open larger positions without needing to liquidate their existing holdings. If trades are profitable, borrowed funds are repaid with fees. In case of losses, the pledged assets are liquidated by OKX to cover the deficit.
JellyC plans to invest approximately US$50 million through this program, aiming to unlock compliant crypto investment avenues for Australian institutional investors. This move could significantly benefit pension funds, asset managers, and family offices seeking to implement robust crypto strategies.
Boosting Crypto Adoption in Australia
The OKX program is designed to be accessible to other "approved institutions," potentially including APRA-regulated super funds. While direct allocations from large funds like AustralianSuper and QSuper have been limited due to concerns about custody, risk, and volatility, there is growing interest. Australian self-managed superannuation funds (SMSFs) already hold around A$1.6 billion in crypto assets, indicating early institutional engagement.
This development coincides with Australia's entry into a six-month pilot phase for Project Acacia, an initiative by the Reserve Bank of Australia exploring digital currency use cases. The project involves testing tokenized asset markets across various sectors, with participation from major banks and fintech companies, further signaling Australia's progressive approach to digital finance.
Sources
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OKX and JellyC Partner With TradeFi Giants For Safer Institutional Crypto Trading in Australia, CoinGape.
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