Standard Chartered to Provide Crypto Custody for 21Shares

According to Cointelegraph, Standard Chartered has announced that it will serve as the digital asset custodian for fund manager 21Shares, marking a significant move in the bank's involvement in the cryptocurrency sector. This decision suggests a potential shift from 21Shares' previous reliance on a crypto-native partner. The bank's global head of financing and securities services, Margaret Harwood-Jones, emphasized that this collaboration allows Standard Chartered to extend its expertise into the rapidly evolving digital asset ecosystem. Previously, 21Shares had partnered with Zodia Custody, a crypto-native custodian co-founded by Standard Chartered in 2020. This partnership indicated the bank's initial reluctance to engage directly with the crypto market. It remains uncertain whether Standard Chartered will replace Zodia Custody or if both entities will operate concurrently. This development comes as traditional financial institutions increasingly offer crypto services, leveraging their reputational advantages over crypto-native firms. Standard Chartered's new digital asset custody service is based in Luxembourg, and the bank recently launched a trading service for major cryptocurrencies aimed at institutions and corporations. Mandy Chiu, 21Shares’ global head of product development, described the collaboration as a milestone in their mission to provide institutional-grade infrastructure to the digital asset ecosystem. She highlighted Standard Chartered's reputation in traditional finance as a significant advantage. Other major banks are also entering the crypto space. In September, US Bancorp reintroduced its digital asset custody services for investment managers, following a previous launch in 2021 that was halted due to regulatory challenges. Additionally, Citigroup is reportedly considering offering cryptocurrency custody and payment services, while Deutsche Bank plans to allow clients to store cryptocurrencies, reflecting a broader trend in the financial industry. This trend has sparked debate within the industry, as crypto-native institutions face increasing competition from traditional financial entities. In October, Martin Hiesboeck from Uphold commented on the shift of large Bitcoin wallets into ETFs, suggesting it undermines the original spirit of cryptocurrency. Robbie Mitchnick of BlackRock noted that the company has facilitated over $3 billion in Bitcoin to ETF conversions, highlighting the convenience for holders to manage their exposure through existing financial relationships.