Standard Chartered Appoints 21Shares for Digital Asset Custody
Major banking institution Standard Chartered has announced that it has been chosen by fund manager 21Shares to serve as its digital asset custodian, signaling a potential shift from the firm’s previous crypto-native partnership. In a statement released on Monday, Standard Chartered disclosed its plans to provide cryptocurrency custody services to 21Shares, which specializes in a variety of exchange-traded crypto products. Margaret Harwood-Jones, the bank’s global head of financing and securities services, emphasized that this collaboration enables them to leverage their expertise in the rapidly changing digital asset landscape.
Transition from Crypto-Native Custody
Previously, 21Shares had engaged with Zodia Custody, a crypto-native custodian established in late June 2024, to manage its assets. Notably, Zodia Custody was co-founded by Standard Chartered in 2020 and has operated as a wholly owned subsidiary, indicating that the bank had preferred to maintain a distance from direct crypto involvement at that time. It remains uncertain whether Standard Chartered intends to fully assume Zodia Custody’s responsibilities or if both entities will continue to function together. This development comes as traditional financial institutions increasingly venture into cryptocurrency services, often boasting a reputation that surpasses that of crypto-native firms.
Standard Chartered Expands Crypto Services
Standard Chartered announced that its new digital asset custody service will be based in Luxembourg, partnering with 21Shares. This initiative follows the bank’s recent launch in mid-July of a trading service that facilitates cryptocurrency trading for institutions and corporations. Mandy Chiu, 21Shares’ global head of product development, described this partnership as a significant achievement in their ongoing objective to provide institutional-grade infrastructure within the digital asset sector. She highlighted the advantages of collaborating with a reputable institution like Standard Chartered, which possesses substantial expertise in cross-border banking, risk management, and custody services.
Traditional Finance Moves Into Crypto
Several other prominent banks have also begun to explore similar opportunities. In September, US Bancorp made a return to the crypto realm by reintroducing its digital asset custody services specifically targeting investment managers. This move follows its initial launch of custody services in 2021, which was curtailed due to challenging regulatory environments. Reports from mid-August indicated that Citigroup, a major player on Wall Street, is contemplating the introduction of cryptocurrency custody and payment services. Additionally, Germany’s largest bank, Deutsche Bank, is reportedly planning to allow its clients to store cryptocurrencies, reflecting a broader trend in the financial sector.
The Evolving Crypto Landscape
This trend has sparked discussions within the industry, as crypto-native institutions encounter fierce competition from traditional finance. In October, Martin Hiesboeck, head of blockchain and crypto research at Uphold, remarked that significant Bitcoin (BTC) wallets transitioning their assets into ETFs represents “another nail in the coffin of the original crypto spirit.” His comments were made in response to Robbie Mitchnick, BlackRock’s head of digital assets, who noted that the firm had already facilitated over $3 billion in real Bitcoin conversions to ETFs, indicating that many holders appreciate the convenience of integrating their crypto exposure within their existing relationships with financial advisers or private banks.
