DBS, Franklin Templeton and Ripple have joined forces to roll out tokenized trading and lending services for institutional investors, built on the XRP Ledger and powered by tokenized money market funds and stablecoins.

The trio signed a memorandum of understanding (MOU) to help investors better manage market volatility by offering a way to shift funds between stablecoins and yield-generating assets, according to a Thursday announcement.

“Digital asset investors need solutions that can meet the unique demands of a borderless 24/7 asset class,” said Lim Wee Kian, CEO of DBS Digital Exchange. “This partnership demonstrates how tokenized securities can play that role while injecting greater efficiency and liquidity in global financial markets,” Kian added.

DBS Digital Exchange (DDEx) will list sgBENJI, a tokenized version of Franklin Templeton’s US Dollar Short-Term Money Market Fund, alongside Ripple USD (RLUSD). This setup will allow clients to trade between RLUSD and sgBENJI at any time, helping them rebalance portfolios quickly and earn yields during uncertain market conditions.

DBS to accept tokenized funds as lending collateral

In the next phase, DBS plans to let clients use sgBENJI as collateral to unlock credit, either through repurchase agreements with the bank or third-party lending platforms, with DBS acting as the collateral agent.

Franklin Templeton will issue sgBENJI on the XRP Ledger, which was chosen for its low fees and high-speed settlement.

Ripple’s Nigel Khakoo called the effort a “game-changer,” noting that investors can move between a stablecoin and a tokenized fund within a “single, trusted ecosystem, unlocking real-world capital efficiency, utility and liquidity that institutions demand.”

The move targets a growing demand from institutions looking for regulated, onchain products. According to a recent survey by Coinbase and EY-Parthenon, 87% of institutional investors expect to allocate funds to digital assets by 2025.

Cointelegraph reached out to DBS and Franklin Templeton for comment, but had not received a response by publication.

Tokenized cross-border settlements

DBS, Franklin Templeton and Ripple’s plan to launch tokenized lending comes as tokenized assets are gaining ground in global capital markets.

As Cointelegraph reported, SBI Shinsei Bank has partnered with Singapore’s Partior and Japan’s DeCurret DCP to explore multicurrency tokenized deposits for cross-border settlements. The trio signed an MOU to develop a blockchain-based framework that enables real-time clearing across various currencies.

The goal is to build a 24/7 global settlement network that reduces reliance on traditional correspondent banking.