Banking giant Standard Chartered may be moving away from its crypto-native partner after fund manager 21Shares announced it has selected it as its digital asset custodian.
According to an announcement Standard Chartered shared with Cointelegraph on Monday, the bank will provide crypto custody services to 21Shares, which offers multiple exchange-traded crypto products. Margaret Harwood-Jones, the bank’s global head of financial and securities services, said the partnership “allows us to extend our expertise into the rapidly evolving digital asset ecosystem.”
However, 21Shares already had a crypto-native custody partner. In late June 2024, the fund manager partnered with Zodia Custody, a crypto-native custodian, to hold the assets. Zodia Custody was co-founded by Standard Chartered in 2020 and operates as a wholly-owned subsidiary, indicating that the bank wanted to avoid direct involvement in cryptocurrencies at the time.
It is unclear whether Standard Chartered will take over Zodia Custody’s role or whether the two organizations will operate in parallel. It is not yet clear whether Standard Chartered will replace Zodia Custody or operate alongside Zodia Custody. The move comes as more traditional financial institutions roll out crypto services, often with better reputations than their crypto-native competitors.
Standard Chartered, 21Shares, and Zodia Custody did not respond to Cointelegraph’s requests for comment in time for publication.
Standard Chartered headquarters in London. sauce: wikimedia
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Traditional finance accepts cryptocurrencies
Standard Chartered said 21Shares will work with its newly established Luxembourg-based digital asset custodian service. The announcement follows the bank’s launch of a trading service in mid-July that allows institutions and businesses to trade major cryptocurrencies.
Mandy Chiu, Global Head of Product Development at 21Shares, said the partnership is “an important milestone in our continued mission to bring institutional-grade infrastructure to the digital asset ecosystem.” He cited the bank’s reputation in traditional finance as an advantage.
“As one of the world’s most trusted financial institutions, Standard Chartered brings deep expertise in cross-border banking, risk management and custody.”
Other major banks have taken similar measures. In September, US multinational financial services company US Bancorp re-entered the cryptocurrency space by relaunching its digital asset custody services aimed explicitly at investment managers. This comes after the company launched its custody service in 2021, but it was later shut down due to unfavorable regulations.
Reports in mid-August also pointed out that Wall Street giant Citigroup is considering plans to provide crypto storage and payment services. In July, Germany’s largest bank, Deutsche Bank, was also reported to be planning to allow customers to store cryptocurrencies, following a broader trend in the country.
Related: US Federal Government Agency Outlines Key Risks for Banks Considering Cryptocurrency Custody
Cryptocurrency and traditional finance are changing together
This trend has sparked debate within the industry as crypto-native institutions face stiff competition.
In October, Martin Heasboek, head of blockchain and crypto research at crypto financial services platform Uphold, said that large Bitcoin (BTC) wallets moving their assets into ETFs “put another nail in the coffin of the true spirit of cryptocurrencies.”
The comments come after Robbie Mitchnick, head of digital assets at BlackRock, said the company has already facilitated more than $3 billion worth of virtual Bitcoin to ETF exchanges. He added that holders recognize the “convenience of retaining exposure within existing financial advisor and private bank relationships.”
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