Standard Chartered targets $1T crypto custody market with Zodia deal

Standard Chartered, the British multinational bank, has decided to consolidate its cryptocurrency operations in‑house. As part of this move, the firm has made a non‑binding offer to acquire Zodia Custody, which provides secure digital asset storage for banks and investment firms.

However, the plan will only take its final form once the regulators give their approval.

As per the plan, the bank will integrate Zodia Custody with its current digital asset services. Additionally, it hopes to increase revenue from institutional crypto clients and cut costs by combining operations.

This means Standard Chartered will not absorb all of Zodia’s custody business. Instead, a new entity called ‘Zodia Solutions’ will be created under SC Ventures to manage the technology and infrastructure platform operations.

Furthermore, it will assist institutions in launching digital asset products and sustaining their collaboration with Standard Chartered and other financial institutions. Remarking on the same, Margaret Harwood-Jones, Global Head of Financing and Securities Services at Standard Chartered, noted, 

It [the acquisition] also reflects the group’s continued focus on building an end-to-end Digital Assets offering and it further strengthens our position as the trusted bridge between TradFi and DeFi.

What does this aquisition imply?

It is clear that Standard Chartered recognizes the long-term potential of digital assets. Notably, it also showcases the desire for more strict oversight of crypto custody services as institutional adoption increases.

As a result, traditional banks choosing the crypto route highlights the rise in crypto adoption. This coincided with Zodia Custody raising $36 million as it pursued international expansion back in 2023.

Crypto custody market dynamics

The announcement comes as the digital asset custody market surpasses $1 trillion, with projections of $7 trillion by 2035 at a compound annual growth rate of about 23.7%. Still, ‘custody’ ranks only second among firms’ priorities for digital asset capabilities over the next two years. 

All things considered, Standard Chartered’s most recent action indicates that traditional banks are actively developing the infrastructure for crypto rather than passively observing it.

Final Summary

• With the help of Zodia Custody, Standard Chartered is planning to bring crypto business in-house.
• This move highlights a shift in perspective of traditional banks for crypto and also the recognition of the long-term potential of crypto.