Standard Chartered Chosen as Custodian by 21Shares
Major banking institution Standard Chartered has announced that fund manager 21Shares has designated it as its digital asset custodian, signaling a potential shift away from a crypto-focused partner. In a statement released on Monday, Standard Chartered indicated to Cointelegraph that it will deliver custody services for cryptocurrencies to 21Shares, which offers a range of exchange-traded products in the crypto space. Margaret Harwood-Jones, who leads the bank’s global financing and securities services, emphasized that this partnership enables them to leverage their expertise in the rapidly changing digital asset landscape.
Transition from Crypto-Native Custodians
Previously, 21Shares had an alliance with a crypto-native custodian, Zodia Custody, which it engaged with in late June 2024 to manage its assets. Notably, Zodia Custody was co-established by Standard Chartered in 2020 and operated as a fully owned subsidiary, suggesting that the bank initially preferred to stay away from direct crypto involvement. As of now, it remains uncertain if Standard Chartered will assume Zodia Custody’s responsibilities or if the two entities will function concurrently.
Traditional Financial Institutions Embrace Crypto
Standard Chartered has confirmed that 21Shares will utilize its newly launched digital asset custody service located in Luxembourg. This development follows the bank’s introduction of a trading service in mid-July, enabling institutions and corporations to engage in transactions involving major cryptocurrencies. Mandy Chiu, the global head of product development at 21Shares, characterized the partnership as a significant milestone in their ongoing effort to provide institutional-grade infrastructure within the digital asset sector. She highlighted the bank’s strong reputation in traditional finance as a key advantage.
Growing Interest from Major Banks
Other prominent financial institutions are also beginning to expand their presence in the crypto arena. In September, US Bancorp, a leading American financial services firm, made a comeback in the crypto sector by relaunching its digital asset custody services specifically for investment managers. This move follows the initial launch of its custody service in 2021, which was later suspended due to regulatory challenges. Furthermore, reports from mid-August suggest that Citigroup is considering offering cryptocurrency custody and payment services. Additionally, Deutsche Bank, Germany’s largest bank, is reportedly planning to enable clients to store cryptocurrencies, aligning with a broader trend within the country.
Competition Between Crypto and Traditional Finance
This trend has sparked discussions within the industry, as crypto-native establishments confront mounting competition from traditional financial entities. In October, Martin Hiesboeck, head of blockchain and crypto research at the financial services platform Uphold, remarked that the movement of substantial Bitcoin (BTC) wallets into exchange-traded funds (ETFs) signifies a departure from the original ethos of crypto. His comments followed statements by Robbie Mitchnick, BlackRock’s head of digital assets, who noted that the firm has successfully facilitated over $3 billion in Bitcoin conversions to ETFs, indicating that asset holders appreciate the convenience of maintaining their investments within their existing financial advisory or private banking arrangements.
