Standard Chartered Expands into Crypto Custody

Standard Chartered has announced that it will serve as the digital asset custodian for 21Shares, marking a significant shift as traditional finance deepens its footprint in the cryptocurrency space. This collaboration raises questions about the future of Zodia Custody, a crypto-native partner with which 21Shares had previously aligned.

In a recent press release, Standard Chartered stated that providing custody for 21Shares will extend their expertise into the rapidly evolving digital asset ecosystem. Margaret Harwood-Jones, leading the bank’s financing and securities services, emphasized this significant step as a means of embracing the growth in crypto.

Historically, 21Shares depended on Zodia Custody, a custodian founded by Standard Chartered in 2020. Details regarding whether Standard Chartered will fully replace Zodia or maintain both services remain unclear. This partnership reflects an ongoing trend where traditional financial institutions are gaining traction and credibility in the crypto domain, often outstripping crypto-native firms in terms of public trust.

Traditional Finance’s Role in Crypto

The newly formed custody service will be based in Luxembourg, a development following the bank’s recent trading service launch for institutional clients, which allows cryptocurrency transactions. Mandy Chiu, 21Shares’ global head of product, hailed this partnership as pivotal in creating robust infrastructure for digital assets.

“As one of the world’s most trusted financial institutions, Standard Chartered brings deep expertise in cross-border banking, risk management, and custody.”

Other major financial institutions are also entering the crypto realm, such as US Bancorp, which has resumed digital asset custody services aimed at investment managers. Additionally, Citigroup and Deutsche Bank are exploring similar offerings.

The Evolving Landscape of Finance

This trend provokes discussion within the crypto industry as traditional assets and crypto navigate a shared path. Notably, Martin Hiesboeck from Uphold suggests the shift of large Bitcoin wallets to ETFs threatens the core ethos of cryptocurrency. Meanwhile, Robbie Mitchnick from BlackRock acknowledges their facilitation of significant Bitcoin transfers to ETFs, indicating a preference that encompasses existing financial relationships.

For more insights, check related articles BlackRock’s Bitcoin Accumulation and US Federal Agencies on Crypto Risks.