DBS Bank, Franklin Templeton, and Ripple launch XRP ledger tokenization loans, a boon for institutional investors.

DBS Bank, Franklin Templeton, and Ripple, three financial giants, announced the signing of a memorandum of understanding to jointly launch tokenized trading and lending services built on the Ripple (XRP) ledger for institutional investors. This groundbreaking collaboration will allow investors to seamlessly convert between stablecoins and yield-bearing assets, injecting greater efficiency and liquidity into the global financial markets, while also helping investors better navigate market fluctuations.

Tokenization Financial Services: A New Era of 24/7 Asset Management

The CEO of DBS Digital Exchange, Lin Weijian, stated: “Digital asset investors need solutions that can meet the unique demands of a borderless, around-the-clock asset class. This collaboration demonstrates how tokenized securities can play this role while injecting greater efficiency and liquidity into global financial markets.”

According to the cooperation agreement, DBS Digital Exchange (DDEx) will launch two key digital assets:

The tokenized version of Franklin Templeton US Dollar Short-Term Money Market Fund sgBENJI

Ripple's USD stablecoin RLUSD

This innovative design will allow customers to trade between RLUSD and sgBENJI at any time, helping them quickly adjust their portfolios and continuously earn returns in uncertain market conditions.

XRP Ledger: The technological foundation for low-cost, high-speed settlement

Franklin Templeton chose to issue sgBENJI on the XRP ledger, mainly due to its low fees and fast settlement advantages. Ripple's senior executive Nigel Khakoo called this collaboration a “game changer” and emphasized that investors can convert between stablecoins and tokenized funds within a “single, trusted ecosystem,” thereby unlocking the real-world capital efficiency, utility, and liquidity needed by institutions.

Tokenized assets as loan collateral: The next stage of financial innovation

The next phase of collaboration is even more revolutionary: DBS Bank plans to allow customers to use sgBENJI as collateral to unlock credit. This can be achieved through entering into repurchase agreements with the bank or third-party lending platforms, with DBS Bank acting as the collateral agent.

This innovation will bring multiple advantages to institutional investors:

· Improve capital utilization efficiency

· Reduce transaction costs

· Achieve 24/7 round-the-clock asset management

· Maintain liquidity during market fluctuations

This move aims to meet the growing demand from institutional investors for regulated on-chain products. According to a recent survey by EY-Parthenon, as many as 87% of institutional investors expect to allocate funds to digital assets by 2025.

Tokenization Cross-Border Settlement: The Evolution of Global Financial Infrastructure

This collaboration also reflects the gradual trend of tokenization of assets in the global capital market. In addition to the cooperation with DBS Bank, Franklin Templeton, and Ripple, other financial institutions are also actively exploring the application of tokenization technology.

For example, SBI Shinsei Bank has partnered with Partior in Singapore and DeCurret DCP in Japan to explore multi-currency tokenized deposits for cross-border settlement. The three parties have signed a memorandum of understanding aimed at developing a blockchain-based framework for real-time settlement across multiple currencies.

These developments collectively indicate that tokenization technology is gradually transitioning from the conceptual stage to practical applications, with the potential to reshape global financial infrastructure. For institutional investors, this means more efficient and flexible asset management options; for financial markets, this represents higher liquidity and lower friction costs.

As financial giants like DBS Bank, Franklin Templeton, and Ripple actively promote the development of tokenization financial services, we may be witnessing an important milestone in the integration of traditional finance and blockchain technology, which will bring profound changes to the global financial market.