Standard Chartered Chooses 21Shares for Digital Asset Custody
Major financial institution Standard Chartered has revealed that it has been selected by fund manager 21Shares to serve as its digital asset custodian, marking a shift from its previous crypto-native partnership. In a statement released on Monday, Standard Chartered announced its intention to deliver cryptocurrency custody services to 21Shares, a firm known for its diverse range of exchange-traded crypto products. Margaret Harwood-Jones, the bank’s global head of financing and securities services, emphasized that this collaboration enables them to leverage their expertise in the rapidly changing digital asset landscape.
Previously, 21Shares had established a relationship with Zodia Custody, a custodian rooted in the crypto industry, to manage its assets as of late June 2024. Zodia Custody, co-founded by Standard Chartered in 2020, functioned as a wholly owned subsidiary; this indicated the bank’s earlier reluctance to engage directly with the crypto sector. It remains uncertain whether Standard Chartered will assume Zodia Custody’s responsibilities or if both entities will coexist in this space. This development is part of a broader trend where conventional financial institutions are increasingly offering crypto services, often enjoying a more favorable reputation compared to their crypto-native counterparts.
At the time of publication, Standard Chartered, 21Shares, and Zodia Custody had not responded to inquiries from Cointelegraph regarding this partnership.
Traditional Finance Embraces Cryptocurrency
Standard Chartered announced that 21Shares will collaborate with its newly launched digital asset custody service located in Luxembourg. This move comes shortly after the bank’s introduction of a trading service in mid-July that enables institutions and corporations to engage in transactions involving major cryptocurrencies. Mandy Chiu, 21Shares’ global head of product development, described this partnership as a significant step toward enhancing institutional-grade infrastructure within the digital asset realm. She highlighted Standard Chartered’s established reputation within traditional finance as a valuable asset.
As one of the most reliable financial institutions globally, Standard Chartered boasts extensive expertise in areas such as cross-border banking, risk management, and custody services. Other prominent banks are also making strides in this domain. For example, in September, US Bancorp reentered the cryptocurrency market by reintroducing its digital asset custody services specifically targeting investment managers. This comes after the firm initially launched a custody service in 2021, which was later suspended due to regulatory challenges.
Additionally, reports from mid-August indicate that Citigroup is considering the launch of cryptocurrency custody and payment services, while Germany’s largest bank, Deutsche Bank, is also expected to allow its clients to store cryptocurrencies—reflecting a growing trend in the financial sector.
Evolving Dynamics Between Crypto and Traditional Finance
This shift has sparked considerable discussion within the industry, as crypto-native institutions now face heightened competition from traditional finance. In October, Martin Hiesboeck, head of blockchain and crypto research at Uphold, remarked that large Bitcoin (BTC) holders transferring their assets into exchange-traded funds (ETFs) signifies a decline of the original ethos of cryptocurrency. His comments followed a statement by Robbie Mitchnick, BlackRock’s head of digital assets, who noted that the firm had facilitated over $3 billion in real Bitcoin conversions to ETFs. He pointed out that asset holders appreciate the convenience of maintaining their investments through established relationships with financial advisors or private banks.
