Banking Capital markets News

StanChart backed METACO, Cobalt partner for institutional digital assets

bitcoin cryptocurrency

Institutional digital asset custody firm METACO is partnering with Cobalt for a SaaS digital asset settlement solution. Cobalt is an FX and digital asset solution provider. Both firms are backed by Standard Chartered, which in December announced its digital asset custody service Zodia. METACO lists Standard Chartered as a user of its SILO platform.

“There remain many frictions for banks and other large trading institutions to enter and scale in crypto markets and we are very excited to partner with Cobalt and enable our clients to leverage their market leading post-trade solutions in fiat and crypto,” said Seamus Donoghue, VP sales & business development at METACO.  

“SILO delivers a SaaS custody solution that in combination with Cobalt’s post-trade settlement solutions will deliver the leading institutional infrastructure for custody and trading to our banking and exchange clients.” 

Last July, Switzerland-based METACO raised a $17 million Series A round led by Germany’s Giesecke+Devrient, the central bank infrastructure provider. Other participants included Swisscom and Swiss Post.

We spoke to Cobalt Chairman Adrian Patten last month. He explained that institutions face a hurdle in that they can’t enter the cryptocurrency market without institutional-grade infrastructure, in part because they’re regulated but also because of investor agreements. 

Cobalt started off providing middle office services to the foreign exchange (FX) sector. Patten noted that many senior hires in the cryptocurrency space have an FX background and look for institutional-grade services that Cobalt offers.

In many ways, Cobalt acts as the glue between an exchange and custody solution. 

“We don’t send the coins or the keys to the exchange. There’s an agreement between this custody (solution) and the exchanges that the limits for their clients to trade is allocated there. And we manage that whole process in a real-time secure manner,” said Patten.

Cobalt also deals with reconciliation, including legal confirmation, netting of multiple transactions and settlement.

Patten concluded, “It enables these institutions to trade and access this market the same way they would foreign exchange.”