Banking Capital markets News

Standard Chartered, Northern Trust to launch cryptocurrency custody solution Zodia

standard chartered

Today Standard Chartered Bank’s SC Ventures and Northern Trust announced their partnership to launch a cryptocurrency custodian solution, Zodia Custody. The offering is expected to launch in London next year, subject to registration with the UK Financial Conduct Authority.

Zodia will allow financial institutions to invest in cryptocurrency assets, initially providing services for only the most traded cryptocurrencies. The solution aims to combine custodial principles, banking expertise and the flexibility of a fintech. Together they hope Zodia will establish Standard Chartered and Northern Trust as digital-asset infrastructure leaders.

“The introduction of digital custody backed by the know-how and experience of global banks is a breakthrough in the evolution and support of institutional cryptocurrency markets,” said Pete Cherecwich, President of Northern Trusts’ Corporate and Institutional Services. “Zodia’s robust capabilities will make it possible for institutional asset owners, family office, and asset managers to invest in a range of cryptocurrencies as interest continues to grow in these emerging and innovative financial instruments.”

Northern Trust first used blockchain technology in 2017 with help from IBM, claiming to be the first to utilize the technology for commercial purposes in the private equity market. Last year, it transferred its private equity administration blockchain to Broadbridge for continued development. This meant the platform became available to the entire industry, as opposed to just Northern Trust clients.

Northern Trust has also collaborated with Singaporean startup BondEvalueon a blockchain-based bond market place, where Northern Trust’s role is as designated custodian.

This week, SC Ventures also launched a blockchain bond project with the Philippines’ UnionBank, creating a blockchain platform for retail bond issuance.

SC Ventures invested in Swiss digital asset custody startup METACO, which raised $17 million in its Series A funding round this year. Standard Chartered is also collaborating with the Hong Kong Monetary Authority and the Bank of Thailand in their DLT-based cross-border payments project, Project Inthanon-Lion Rock. Plus, it’s involved in several trade finance platforms, including Marco PoloContour, and Trusple.

Meanwhile, incumbent banks across the world are reading themselves to launch their own digital asset custodial services.

In the U.S, the Office of the Comptroller of the Currency (OCC) announced banks may provide digital asset custody services in the same manner they provide safe deposit boxes. And in Germany earlier this year, 40 banks approached German regulator BaFin to express an interest in digital asset custody services.

This past month, South Korea’s largest bank by asset value Kookmin Bank announced its plans to introduce a digital asset custodial service within a year.

Lastly, Spain’s second-largest bank BBVA is rumored to be soon entering the cryptocurrency trading sphere, according to Coindesk.