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Standard Chartered is ditching crypto-native custody. Fund manager 21Shares just tapped the banking giant to safeguard its digital assets, signaling a shift towards traditional finance players in the burgeoning crypto space.
Standard Chartered is diving deeper into the crypto world, offering custody services to 21Shares, a major player in the crypto exchange-traded product game. This move, unveiled Monday, signals a bold step as the bank empowers 21Shares’ expanding suite of crypto offerings. Margaret Harwood-Jones, Standard Chartered’s global head of financing and securities services, sees this collaboration as a strategic expansion, allowing the bank to plant its flag firmly within the burgeoning digital asset landscape.
21Shares wasn’t exactly venturing into uncharted territory. Months prior, they’d already secured a crypto-native custodian: Zodia Custody. Born from a Standard Chartered initiative in 2020, Zodia, operating as a wholly owned subsidiary, hinted at the bank’s cautious dance around direct crypto involvement, choosing a supporting role instead of center stage.
Will Standard Chartered absorb Zodia Custody entirely, or forge an alliance? The question hangs in the balance as the financial giant edges further into the crypto space. This strategic maneuver reflects a growing trend: traditional institutions leveraging their established credibility to challenge the dominance of crypto-native firms.
Standard Chartered, 21Shares and Zodia Custody had not answered Cointelegraph’s request for comment by publication.
Standard Chartered headquarters in London. Source: Wikimedia
Related: BlackRock quietly accumulated 3% of all Bitcoin. Here’s what that means
Traditional finance takes on crypto
Standard Chartered is deepening its crypto footprint. Fresh off launching its institutional crypto trading desk in July, the banking giant is partnering with 21Shares. The collaboration will leverage Standard Chartered’s new Luxembourg-based digital asset custody arm, signaling a bolder push into the burgeoning world of institutional crypto services.
“21Shares’ partnership with this banking titan isn’t just another collaboration; according to Mandy Chiu, their Global Head of Product Development, it’s a “milestone” in the quest to fortify the digital asset realm with institutional-grade infrastructure. The secret weapon? Leveraging the bank’s rock-solid reputation forged in the fires of traditional finance to build trust and stability in the crypto space.”
Unlock seamless global finance with Standard Chartered. We’re the trusted partner navigating cross-border complexity, mitigating risk, and safeguarding your assets.
Following suit, other financial giants are making waves in the crypto realm. September saw US Bancorp, a multinational financial powerhouse, boldly step back into the digital asset arena. They’ve resurrected their digital asset custody services, now laser-focused on investment managers. This move marks a phoenix-like rebirth, rising from the ashes of their 2021 custody service, which was grounded due to regulatory headwinds.
Forget Fort Knox, Wall Street’s New Vaults are Digital: Banking behemoths are stampeding into crypto. Whispers from mid-August suggest Citigroup is the latest giant eyeing crypto custody and payment services. Just a month prior, Deutsche Bank, Germany’s financial titan, signaled its intent to let clients stash their digital gold, riding a wave of crypto adoption sweeping the nation.
Related: US Federal agencies outline key risks for banks eyeing crypto custody
Crypto and traditional finance change together
That trend has stirred debate within the industry, as crypto-native institutions face intense competition.
October saw Martin Hiesboeck, Uphold’s blockchain guru, declare large Bitcoin holders flocking to ETFs as a death knell for crypto’s rebellious roots.
BlackRock’s Bitcoin ETF is off to a roaring start. According to Robbie Mitchnick, Head of Digital Assets, a staggering $3 billion has already flowed from real Bitcoin into their ETF. The appeal? Mitchnick notes holders are drawn to the “convenience of holding Bitcoin exposure within their existing financial advisor or private bank relationships,” streamlining digital asset management within familiar, trusted structures.
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