Standard Chartered-owned crypto company Zodia is launching in Singapore

A view of Standard Chartered Bank in Singapore, May 3, 2023.

Caroline Chia | Reuters

Zodia Custody, a company that helps large institutions store their cryptocurrencies, launched in Singapore on Tuesday to tap the country’s fast-growing digital asset market.

The development makes Zodia the first company owned and partnered with banks to provide digital asset custody services to financial institutions in Singapore, Zodia said in a press release.

Zodia is a subsidiary of Standard Chartered, the British bank with a presence primarily in emerging markets such as Asia, Africa and the Middle East. StanChart launched Zodia in 2021 together with Northern Trust, highlighting the interest of large institutions in interacting with digital currencies. Zodia is also a partner in SBI Digital Asset Holdings, the crypto division of Japanese bank SBI. As part of this agreement, SBI also agreed to launch its depository business in Japan.

Zodia said it wants to expand in Asia Pacific to meet growing demand from institutions for bank-grade custody of digital assets, as well as demand from existing customers in the region, the company said.

Singapore is “reaching the next level of maturity” in terms of setting rules for cryptoassets and developing central bank digital currencies, Zodia CEO Julian Sawyer said in a call with CNBC. Sawyer previously co-founded Starling Bank.

“Singapore is a market that has long been an unknown in the crypto world,” said Sawyer. “We want to be part of it. We believe that the market for a bank-owned custodian is actually what the market wants.”

Zodia works with clients ranging from hedge funds and high-frequency traders to prime brokers, exchanges and asset managers.

Standard Chartered has a “fantastic brand” in Singapore, Sawyer said, adding that the backing of such a large institution has helped boost discussions with major financial firms. “The affiliation with Standard Chartered comes up in every single conversation,” he told CNBC. “It’s absolutely critical.”

“We take on your risk, your compliance frameworks, information security, resilience, [and] Managing people,” he added.

Singapore is experiencing rapid growth when it comes to digital asset adoption. According to market research firm Statista, the city-state’s crypto ownership rate is 19%, higher than the global average of 15%.

Funding for crypto companies in Singapore has also remained strong despite a bear market the industry experienced following the collapse of FTX, Three Arrows Capital, Terra and several other previously household names.

According to KPMG’s Pulse of Fintech report for the second half of 2022, crypto or blockchain was the top area of ​​fintech investment in Singapore in 2022, attracting $1.2 billion in funding in 2022. However, crypto-related funding still fell by 21%. Globally, crypto startups raised $23.1 billion in 2022, down 23% from the previous year.

Zodia’s move to Singapore follows an expansion into Abu Dhabi. The company received in-principle regulatory approval in Abu Dhabi earlier this month to capitalize on the UAE capital’s crypto-friendly regulatory environment and status as a financial hub.

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