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%Ripple announced a partnership with Franklin Templeton and DBS Bank to create repo markets based on stablecoins and tokenized collateral. Franklin Templeton will issue the sgBENJI token, representing shares in a tokenized U.S. dollar short-term money market fund.

The token will be listed on the Singapore DBS Digital Exchange. Ripple's (CRYPTO: $RLUSD ) %Stablecoin, currently near $730 million in market capitalization, will also trade on the platform.

https://twitter.com/Ripple/status/1968480549523083340

The exchange will enable the market players to exchange sgBENJI for RLUSD directly in real time. This operation establishes a connection between controlled yield assets and a stablecoin. Users can hold reserves in the fund, generate yield, and retrieve liquidity when needs arise. The framework mirrors the traditional structure of collateralized lending against short-term securities, a key feature of global funding markets.

Repo Model Expansion and Collateral Usage

The selected model reflects the organization of global repo markets, which constitute a support system of short-term funds. Institutional desks can achieve liquidity management through sgBENJI RLUSD trade without being exposed to regulated yields.

Ripple's head of digital assets, Nigel Khakoo, called the initiative a structural change for capital markets. He said the ability to move between a stablecoin and a tokenized fund in one environment delivers efficiency and liquidity. The model also aligns with regulatory frameworks by linking a registered money market fund with a regulated exchange.

The next phase in the development of sgBENJI will involve DBS's increased implementation. The bank will enable its clients to release credit using the tokenized fund as collateral. Direct repos with DBS will be used as collateral lending options, and some arrangements through external platforms. In either of the latter cases, DBS will become the collateral agent and guarantee that assets pledged are managed in a controlled environment.

XRP Ledger Powers Franklin Templeton's Token Issuance

Franklin Templeton will issue sgBENJI on the XRP Ledger, with the connection that the network efficiently processes high volumes of tokenized securities. Ripple observed that XRPL has low charges and quick settlement that would suit tokenized money market funds.

Notably, he also plans to distribute sgBENJI across multiple blockchains. However, XRP Ledger will remain a central platform for issuance. With XRPL-based issuance, the firm anticipates high throughput, which gives it the capacity to be interoperable with other networks.

Ripple, DBS, and Franklin Templeton executives referred to the partnership as a breakthrough in tokenized capital markets. They stressed that repo, a trillion-dollar market in conventional finance, can be among the first spheres where blockchain has a definite utility to banks, asset managers, and regulators. The project places stablecoins and token funds as the building blocks of a new digital market infrastructure.