Standard Chartered Partners with 21Shares for Digital Asset Custody
Major financial institution Standard Chartered has announced that it will serve as the digital asset custodian for fund manager 21Shares, marking a shift from its previous crypto-native partner. The announcement shared with Cointelegraph on Monday reveals that Standard Chartered will provide custody services for 21Shares, which specializes in various exchange-traded crypto products. Margaret Harwood-Jones, the bank’s global head of financing and securities services, expressed that this partnership enables them to leverage their expertise in the rapidly evolving digital asset landscape.
Transition from Crypto-Native Partners
Previously, 21Shares had a partnership with Zodia Custody, a crypto-native custodian founded in 2020 by Standard Chartered itself. Zodia Custody was designed to operate independently, illustrating the bank’s desire to maintain a distance from direct crypto involvement at that time. It remains uncertain whether Standard Chartered will take over Zodia Custody’s functions or if both entities will coexist in this space. The move reflects a growing trend of traditional financial institutions entering the crypto sector, often enjoying a stronger reputation than their crypto-native counterparts.
Traditional Finance Embraces Digital Assets
Standard Chartered indicated that 21Shares will utilize its newly launched digital asset custody service based in Luxembourg. This announcement follows the recent introduction of a trading service by the bank that enables institutions and corporations to trade significant cryptocurrencies. Mandy Chiu, 21Shares’ global head of product development, highlighted that this collaboration marks a crucial step in their ongoing mission to enhance institutional-grade infrastructure within the digital asset realm. She emphasized Standard Chartered’s esteemed reputation in traditional finance as a significant advantage.
Other Major Banks Join the Crypto Custody Trend
This trend is not isolated, as other leading banks are also stepping into the crypto space. In September, US Bancorp re-entered the market by re-establishing its digital asset custody services specifically for investment managers, following the closure of its earlier service due to regulatory challenges. Additionally, reports from mid-August suggested that Citigroup is considering offering cryptocurrency custody and payment services, while Germany’s largest bank, Deutsche Bank, is also planning to enable its clients to store cryptocurrencies.
The Evolving Landscape of Crypto and Traditional Finance
This movement towards integrating crypto within traditional finance has sparked discussions within the industry, particularly as crypto-native institutions encounter heightened competition. In October, Martin Hiesboeck, who leads blockchain and crypto research at Uphold, remarked that substantial Bitcoin (BTC) wallets transitioning into ETFs signal a departure from the original ethos of crypto. His comments were echoed by Robbie Mitchnick, head of digital assets at BlackRock, who noted that the firm has facilitated over $3 billion in actual Bitcoin conversions to ETFs, illustrating that asset holders appreciate the convenience of managing their investments within established financial advisory or private banking frameworks.
