JellyC says this initiative will enhance its capital efficiency and provide a safe and compliant solution for institutions in Australia to invest in digital assets.
Aussie digital asset investment firm JellyC has joined a new ‘collateral mirroring’ program that enables lower-risk institutional trading via the OKX exchange with asset custody handled by global investment bank Standard Chartered.
JellyC, which offers regulated funds designed to give institutional investors exposure to digital assets, will utilise Franklin Templeton’s tokenised money market fund (TMMF) as off-exchange collateral for trading on OKX. In addition to the TMMF, cryptocurrencies may also be used as trading collateral to a lesser extent.
In a statement to Crypto News Australia, JellyC said the initiative “significantly enhances [its] capital efficiency…while maintaining the highest standards of security.” Working with ‘mirrored’ capital, rather than funds held in a third-party wallet, will allow the firm to quickly deploy capital for trading with less risk.
JellyC’s CEO Michael Prendiville, said the arrangement will see institutional digital asset investing in Australia brought up to the same standards of safety and rigour that TradFi has been held to for decades.
Standard Chartered and OKX announced the collateral mirroring programme in April. It lets firms “utilise cryptocurrencies and tokenised money market funds as off-exchange collateral for trading.” Franklin Templeton’s TMMF is the first of what is expected to be many money market funds to be able to be used as collateral under the programme.
JellyC’s investment products include funds aimed at the wealth and funds management sector and the Superannuation industry in Australia.
“We are witnessing an increasing institutional demand for digital asset trading solutions that leverage established banking infrastructure, ensuring secure and compliant capital deployment in crypto markets,” Prendiville said.
Franklin Templeton a Pioneer In Money Market Fund Tokenisation
Franklin Templeton was among the first major fund managers to tokenise a money market fund, launching its Franklin OnChain US Government Money Fund (FOBXX) back in 2021. At that time it was the first US-registered mutual fund using a public blockchain to record transaction and ownership information.
Initially FOBXX launched on the Stellar blockchain, but it has since expanded to Avalanche, Base, Aptos and Ethereum. Both institutional and retail investors are able to access FOBXX by buying BENJI tokens, which represent ownership of the fund.
At the time of writing, data from real-world asset tracking website rwa.xyz showed FOBXX was the second largest tokenised US Treasury fund, with a market cap of just over US$764 million (AU$1.1 billion) — behind only BlackRock’s BUIDL fund which has a market cap of US$2.4 billion (AU$3.68 billion).
Tokenised Money Market Funds 101
Money market funds have become a popular target for tokenisation because they offer many of the benefits of stablecoins — they maintain a stable value, are transferable, can easily be used as collateral and can have existing on and off ramps to TradFi.
However, TMMFs have some advantages over stablecoins which often make them more attractive to institutional investors. They’re regulated securities, they can pay yield directly to shareholders, and are only available to investors who’ve passed KYC/AML checks.
TMMFs also have better transparency than most stablecoins, as the funds can only be backed by a certain subset of low risk assets and investors are able to access daily reporting on fund statuses.
Essentially, TMMFs function very much like stablecoins but with enhanced investor protections.
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