The venture investments unit of Standard Chartered, the 43rd-largest bank in the world according to S&P Global, announced on Dec. 9 that it would begin offing cryptocurrency custody services to institutional clients.
Dating to 1853, the London-based bank said it has partnered with global asset and wealth management services firm Northern Trust to launch Zodia Custody, an institutional-grade crypto custodian targeting institutional and wealthy clients.
Zodia’s launch is expected next year, pending approval of the UK Financial Conduct Authority. In July, U.S. Comptroller of the Currency Brian Brooks announced that American banks are allowed to offer custody services for digital assets.
Standard Chartered said Zodia combines the policies, expertise, and infrastructure of a traditional bank’s asset custody “with the agility of a fintech company… that adapts to the changing needs of clients and the market.”
While there is growing interest in cryptocurrency investments by institutional customers, they currently account for less than 10% of digital asset buyers, Standard Chartered said.
Pete Cherecwich, president of Northern Trust’s corporate and institutional services, said introducing custody services by global banks “is a breakthrough in the evolution and support of institutional cryptocurrency markets.” He added:
Zodia’s robust capabilities will make it possible for institutional asset owners, family offices and asset managers to invest in a range of cryptocurrencies as interest continues to grow in these emerging and innovative financial instruments.”
At launch, Zodia will provide custody services for five cryptocurrencies: bitcoin (BTC), ether (ETH), XRP, litecoin (LTC), and bitcoin cash (BCH).
“The launch of Zodia demonstrates our commitment to rewiring the DNA in banking,” said Alex Manson, head of SC Ventures. “Drawing on Standard Chartered’s heritage of providing custody services to institutional clients for 160 years, Zodia’s mission is to be a ‘force for good’ by lifting industry standards for digital assets in a sustainable, safe and responsible way.”
Both Standard Chartered and Northern Trust have experience working with digital assets. Standard Chartered is collaborating with the Bank of Thailand and the Hong Kong Monetary Authority to explore using distributed ledger technology for cross-border money transfers. Northern Trust was behind what it says was the industry’s first use of blockchain technology in the private equity market.