SC Ventures, the innovation and ventures unit of Standard Chartered, and Northern Trust, a provider of asset servicing, have partnered to launch Zodia Custody, an institutional-grade custody solution for cryptocurrencies.Cryptocurrencies already represent 0.3 per cent of the world’s currency and bank deposits and are forecast to continue growing with a CAGR of 32 per cent from 2019 to 20241. While there is increasing interest from institutional investors, they account for only 9 per cent of investments in cryptocurrencies at present.
Zodia is designed to enable institutions to invest in the emerging cryptocurrency assets that are transforming how financial markets operate, including transaction and settlement activities. Under the agreement, which is subject to registration with the UK Financial Conduct Authority (FCA), all applicable regulatory filings and customary closing conditions, Zodia is expected to begin operations in London in 2021.
Zodia combines the traditional custody principles and expertise of a bank with the agility of a fintech company to provide an infrastructure that meets the high standards and expectations of institutional investors through a platform that adapts to the changing needs of clients and the market.
At launch, pending regulatory approval, Zodia will provide custody services for the most-traded cryptocurrency assets – bitcoin, ethereum, followed by XRP, litecoin, and bitcoin cash – which represent the majority of client demand and activity, accounting for approximately 80 per cent of the total assets [equivalent to USD395 billion] traded on the top cryptocurrency exchanges.
Maxime De Guillebon, Chief Executive Officer of Zodia, says: “Zodia was established to address the need for a cryptocurrency custodian that truly understands custody. We combine the risk management, compliance, governance and security approach of a regulated financial institution with the cutting-edge innovation of crypto asset and key management technologies. By doing so, we enable operational efficiency and speed of transaction without compromising on security or reliability.”
Alex Manson of SC Ventures, says: “The launch of Zodia demonstrates our commitment to rewiring the DNA in banking. Drawing on Standard Chartered’s heritage of providing custody services to institutional clients for 160 years, Zodia’s mission is to be a ‘force for good’ by lifting industry standards for digital assets in a sustainable, safe and responsible way.”
Pete Cherecwich, President, Corporate & Institutional Services, Northern Trust, says: “The introduction of digital custody backed by the know-how and experience of global banks is a breakthrough in the evolution and support of institutional cryptocurrency markets. Zodia’s robust capabilities will make it possible for institutional asset owners, family offices and asset managers to invest in a range of cryptocurrencies as interest continues to grow in these emerging and innovative financial instruments.”