Standard Chartered Chooses 21Shares for Digital Asset Custody
In a significant development, Standard Chartered has announced that it will serve as the digital asset custodian for fund manager 21Shares, indicating a possible shift away from a previous partnership with a crypto-focused custodian. The announcement, made public on Monday and shared with Cointelegraph, reveals that Standard Chartered will offer cryptocurrency custody services to 21Shares, which is known for its array of exchange-traded crypto products. Margaret Harwood-Jones, the global head of financing and securities services at the bank, emphasized that this collaboration will enable them to leverage their expertise within the rapidly evolving digital asset landscape.
Transitioning from Crypto-Native Custodians
Previously, 21Shares had engaged with Zodia Custody, a crypto-native custodian established in June 2024 to manage its assets. Notably, Zodia Custody was co-founded by Standard Chartered in 2020 and has functioned as a fully owned subsidiary, suggesting that the bank aimed to maintain some distance from direct crypto involvement at that time. The current situation raises questions about whether Standard Chartered will replace Zodia Custody completely or if both entities will coexist in the custodial space. This transition aligns with the trend of traditional financial institutions expanding their crypto offerings, often benefiting from a more established reputation compared to their crypto-native counterparts.
Standard Chartered Enhances Its Crypto Services
According to the announcement, 21Shares will collaborate with Standard Chartered’s newly launched digital asset custody service located in Luxembourg. This announcement follows the bank’s introduction of a trading platform in mid-July that enables institutions and corporations to trade significant cryptocurrencies. Mandy Chiu, the global head of product development at 21Shares, remarked that this partnership marks a pivotal step in their ongoing goal to provide institutional-grade infrastructure to the digital asset ecosystem. She highlighted Standard Chartered’s esteemed reputation in traditional finance as a key advantage.
Traditional Financial Institutions Embrace Crypto
Standard Chartered is not alone in its foray into the cryptocurrency sector. In September, US Bancorp announced its return to the crypto market by reintroducing its digital asset custody services tailored specifically for investment managers. This move comes after the company initially launched a custody service in 2021, which was subsequently discontinued due to regulatory challenges. Additionally, reports from mid-August indicated that Citigroup is exploring the possibility of offering cryptocurrency custody and payment services, while Germany’s largest bank, Deutsche Bank, is also planning to enable its clients to store cryptocurrencies, reflecting a broader trend across the financial industry.
The Intersection of Crypto and Traditional Finance
The rising involvement of traditional finance in the cryptocurrency market has sparked discussions within the industry, as crypto-focused institutions encounter increasing competition. In October, Martin Hiesboeck, head of blockchain and crypto research at Uphold, expressed concerns that large Bitcoin wallets transitioning into ETFs could undermine the foundational ethos of cryptocurrency. This sentiment was echoed by Robbie Mitchnick, BlackRock’s head of digital assets, who noted that the firm has facilitated over $3 billion in real Bitcoin conversions to ETFs. He remarked that holders appreciate the convenience of managing their crypto exposure within their established relationships with financial advisers or private banks.
