Standard Chartered Partners with 21Shares for Digital Asset Custody
Major banking institution Standard Chartered has announced its selection as the digital asset custodian for fund manager 21Shares, suggesting a shift away from the company’s previous crypto-native partner. In a statement released on Monday and shared with Cointelegraph, the bank confirmed that it will provide cryptocurrency custody services to 21Shares, which is known for offering various exchange-traded cryptocurrency products. Margaret Harwood-Jones, the global head of financing and securities services at Standard Chartered, highlighted that this collaboration enables the bank to leverage its expertise within the rapidly evolving digital asset market.
Transition from Crypto-Native Custodian
Previously, 21Shares had been working with a crypto-focused custody partner. In June 2024, the fund manager formed a partnership with Zodia Custody, a custodian established by Standard Chartered in 2020 that operated as a fully owned subsidiary. This earlier alliance suggested that the bank was aiming to remain at arm’s length from direct crypto involvement. It remains uncertain whether Standard Chartered will completely take over the responsibilities of Zodia Custody or if both entities will coexist in managing 21Shares’ assets.
Traditional Institutions Embrace Crypto Services
This development comes amid a broader trend where traditional financial institutions are entering the cryptocurrency space, often enjoying reputational advantages compared to their crypto-native counterparts. Standard Chartered’s digital asset custody service will be based in Luxembourg, as the bank continues to expand its offerings. This announcement follows the launch of a trading service in mid-July, allowing institutional clients and corporations to trade major cryptocurrencies. Mandy Chiu, 21Shares’ global head of product development, described this partnership as a significant milestone in enhancing institutional-grade infrastructure within the digital asset ecosystem. She emphasized the bank’s solid standing in traditional finance as a pivotal advantage.
Competitive Landscape for Crypto Custody
Other established banks have also begun to broaden their involvement in the cryptocurrency sector. For instance, in September, US Bancorp made a return to crypto by reintroducing its digital asset custody services targeting investment managers. This move came after the company initially launched its custody service in 2021 but had to withdraw it due to unfavorable regulatory conditions. Additionally, reports from mid-August indicated that Citigroup is contemplating the launch of cryptocurrency custody and payment services, while Deutsche Bank, Germany’s largest bank, is also exploring options for allowing clients to store cryptocurrencies.
The Evolving Relationship Between Crypto and Traditional Finance
This trend has sparked discussions within the industry, particularly regarding the competitive pressures faced by crypto-native institutions. Martin Hiesboeck, head of blockchain and crypto research at the financial platform Uphold, noted that the movement of large Bitcoin wallets into exchange-traded funds (ETFs) represents a departure from the original ethos of cryptocurrency. This sentiment follows comments from Robbie Mitchnick, BlackRock’s head of digital assets, who revealed that the firm has facilitated over $3 billion in actual Bitcoin conversions to ETFs, highlighting a growing preference among holders for the convenience of managing their assets within established financial advisory frameworks.
