Standard Chartered to launch crypto custody service for Institutional Investors

SC Ventures, the innovation and ventures unit of Standard Chartered plans to launch an institutional-grade cryptocurrency custody solution. Source: Press release in BusinessWire.

The joint venture named Zodia combines the traditional custody principles and expertise of a bank to provide an infrastructure that meets the high standards and expectations of institutional investors. Zodia Custody is in the process of registering with the FCA under UK Money Laundering Regulations. It is expected to begin operations in London in 2021.

At launch, Zodia will provide custody services for the most-traded cryptocurrency assets – Bitcoin, Ethereum, XRP, Litecoin, and Bitcoin Cash – which represent the majority of client demand and activity, accounting for approximately 80% of the total assets [equivalent to USD 395 B] traded on the top cryptocurrency exchanges.

Cryptocurrencies already represent 0.3% of the world’s currency and bank deposits. It is forecasted to continue growing with a CAGR of 32% from 2019 to 2024. While there is increasing interest from institutional investors, currently they account for 9% of investments in cryptocurrencies at present.

The planned custody service is a result of rising institutional interest in digital currencies, it stated. Maxime De Guillebon, the appointed Chief Executive Officer of Zodia, said:

Zodia was established to address the need for a cryptocurrency custodian that truly understands custody.

We combine the risk management, compliance, governance, and security approach of a regulated financial institution with the cutting-edge innovation of crypto asset and key management technologies. By doing so, we enable operational efficiency and speed of transaction without compromising on security or reliability.

Alongside Standard Chartered new venture, Standard Chartered is also collaborating with the Bank of Thailand and the Hong Kong Monetary Authority to explore distributed ledger interoperability for cross-border fund transfers.