Zodia Faces an Unclear Path as Standard Chartered Moves Forward with Traditional Finance Crypto Custody
- Standard Chartered partners with 21Shares to offer crypto custody, signaling TradFi's deeper integration into digital assets. - Zodia Custody's uncertain future highlights competitive pressures as crypto-native custodians face challenges from traditional banks. - Legal risks and a credit downgrade complicate Standard Chartered's crypto expansion amid regulatory shifts like Japan's asset segregation rules. - Industry trends show traditional banks leveraging reputation and compliance to compete with crypto
Standard Chartered
21Shares’ choice to collaborate with Standard Chartered instead of Zodia underscores the mounting competition facing crypto-native custodians. Mandy Chiu, who leads global product development at 21Shares,
Nevertheless, Standard Chartered’s expansion into digital assets is complicated by ongoing legal issues. Recently, a court in Singapore allowed a $2.7 billion lawsuit to proceed against the bank for its alleged involvement in the 1MDB fraud case, which saw $4.5 billion misappropriated from Malaysia’s sovereign wealth fund. The bank has rejected the claims and intends to challenge the ruling
The move toward custody solutions from established financial institutions reflects larger trends in the industry. Traditional banks are leveraging their regulatory know-how and established reputations to compete with crypto-native companies. For instance, Citi has recently teamed up with Coinbase to enhance digital asset payment services for institutional customers, focusing on fiat gateways and payment management
The agreement between 21Shares and Standard Chartered also comes as regulatory environments are evolving. Japan’s Financial Services Agency (FSA)
Although the future of Zodia Custody is still uncertain, Standard Chartered’s entry into crypto custody marks a crucial development for the sector. As established banks increase their involvement with digital assets, they bring both trust and heightened scrutiny, influencing the direction of a market still facing regulatory and operational hurdles. The results of this shift will likely determine how traditional and crypto-native firms interact in the coming years.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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