Standard Chartered PLC (SCBFF) and Northern Trust Corporation (NTRS) are collaborating to establish a crypto custody service aimed at institutional investors. The new service, called Zodia, will go live in 2021. It will offer custody services for the five largest traded cryptocurrency assets – Bitcoin, Ethereum, XRP, Litecoin, and Bitcoin Cash – which account for 80% of the cryptocurrency market capitalisation.
“The introduction of digital custody supported by multinational banks’ know-how and expertise is a milestone in the development and support of institutional cryptocurrency markets,” said Pete Cherecwich, Northern Trust’s president of Corporate & Institutional Services.
- Standard Chartered and Northern Trust will collaborate to offer a cryptocurrency custody solution next year.
- Standard Chartered is also said to be planning to establish a cryptocurrency trading platform next month.
- These movements are part of institutional investors’ larger re-evaluation of crypto markets.
Northern Trust has been evaluating market custody solutions since 2018. The Chicago-based asset management firm said at the time that it was “creating a means” to provide custody services at a lower cost than rivals in the industry. It then extended its crypto services to include Net Asset Value (NAV) pricing agreements, anti-money laundering (AML) compliance, and crypto-trade reconciliation.
A Crypto Trading Platform at Standard Chartered
Standard Chartered is also working on a crypto trading platform for the institutional sector. According to unidentified sources, the service might be available as soon as next month, according to Coindesk. For the effort, the bank has teamed with “five of the largest traders in digital assets and four exchanges,” and it wants to launch it with an Ethereum ERC-20 token that will operate as a stablecoin or medium of exchange inside the trading platform.
“We are developing our own token of fiat collateral in the hope that it will become the equivalent of Tether, except that the tokenized collateral or money would be housed in the trading bank account of a genuine bank, such as a Standard Chartered, JPMorgan, or Deutsche Bank,” a source told Coindesk.
Standard Chartered and Northern Trust join Spanish bank Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) in offering crypto custody services as institutions become more interested in cryptocurrencies. Their actions are part of a larger trend among banks and institutional investors to reconsider their position on cryptocurrency markets.
When cryptocurrency markets underwent a price bubble in 2017, institutional investors and banks labeled them a “fraud” and “rat poison squared.” Recent legislative clarity, coupled with infrastructure advances for financial and trading services, has prompted a reconsideration. For example, Larry Fink, CEO of the world’s largest asset manager, BlackRock, Inc. (BLK), has said that Bitcoin might expand into a worldwide market.
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