Standard Chartered Muscling Into Asian Crypto Space
UK banking giant Standard Chartered is making a concerted foray into the Asian crypto sector through its Singapore-based subsidiary, Standard Chartered Ventures.
Targeting institutional business
That’s according to a report by Nikkei Asia on Tuesday. It’s believed that the company is positioning itself as a trusted choice for institutional cryptocurrency clients amid the backdrop of digital token price volatility and recent upheavals in the industry. The move will pit the British bank directly against global crypto exchange Binance in key Asian markets, specifically Singapore and Japan.
Rene Michau, the Global Head of Digital Assets at Standard Chartered, emphasized what he considers to be the bank’s unique advantage in the digital asset space, stating:
“As regulated banks, we have a fairly deep infrastructure around risk, conduct compliance, and the activities that go along with crypto assets.”
This solid infrastructure includes established risk frameworks, governance structures, and compliance tools that Standard Chartered is keen to bring into the cryptocurrency sphere, thus making it an attractive option for its clients.
Zodia Custody and Zodia Markets
Standard Chartered’s substantial involvement in the cryptocurrency market is channeled through its majority ownership of Zodia Custody, responsible for safeguarding digital assets, and Zodia Markets, a crypto exchange tailored for institutional clients.
Both entities have been making significant progress in bringing their offerings to market in recent months. Zodia Custody recently launched its services in Singapore, offering a secure solution for financial institutions to manage their crypto holdings. Last month it launched a crypto staking product targeted at institutional clients.
In the same month, Zodia Markets achieved in-principle approval to trade as a broker-dealer in the United Arab Emirates. Zodia Custody has also been successful in the UAE, launching its crypto custodian service in Dubai in May.
Japan and Singapore
This concerted effort by Standard Chartered follows a broader trend where traditional financial institutions, such as DBS Group Holdings in Singapore, are entering the cryptocurrency market, capitalizing on the challenges faced by younger crypto players in proving their credibility.
Binance rebranded its Binance Custody unit as Ceffu and expanded its offerings for corporate customers in Singapore. While Binance asserts the independence of Ceffu, the exact nature of their capital relationship remains undisclosed.
A parallel competition is unfolding in Japan, where Binance Japan has entered the market and Standard Chartered’s Zodia Custody has formed a joint venture with SBI Digital Asset Holdings, targeting institutional clients.
While Standard Chartered has achieved a lot through its crypto-focused subsidiaries in a short space of time, there’s always room for improvement. In June, Hong Kong’s banking regulator singled out Standard Chartered alongside HSBC, appealing to both banking groups to make greater efforts to bank crypto clients within the Chinese autonomous territory, as it looks to compete with Singapore in becoming a regional crypto hub.
The cryptocurrency sector has witnessed increased scrutiny as virtual currencies like Bitcoin and Ether have gained popularity. The rise of digital token exchanges, each vying for custody of assets belonging to investors who have embraced cryptocurrencies, has sparked concerns about corporate governance and security.
Giants in traditional finance, like Standard Chartered, are stepping in to offer institutional investors a safer path to engage with virtual assets while leveraging the trust associated with established brands.
