Major bank Standard Chartered has announced that fund manager 21Shares has selected it as its digital asset custodian, a move that may signal a shift away from crypto-native partners for the fund manager.
According to an announcement from Standard Chartered, the bank will provide crypto custody services to 21Shares, which offers a range of exchange-traded crypto products. Margaret Harwood-Jones, Standard Chartered's global head of financing and securities services, stated that this collaboration enables the bank to "extend our expertise into the fast-evolving digital asset ecosystem."
This development comes after 21Shares had previously partnered with crypto-native custodian Zodia Custody in late June 2024 to hold its assets. Zodia Custody was co-founded by Standard Chartered in 2020 and initially operated as a wholly owned subsidiary, suggesting the bank's earlier intention to avoid direct involvement in the cryptocurrency space.
It remains unclear whether Standard Chartered will assume Zodia Custody's existing role or if both entities will operate concurrently. This strategic move aligns with a broader trend of traditional financial institutions expanding their crypto services, often leveraging their established reputations to compete with crypto-native firms.
As of publication, Standard Chartered, 21Shares, and Zodia Custody had not responded to requests for comment from Cointelegraph.
Traditional Finance Expands Into the Crypto Sector
Standard Chartered will provide its digital asset custody services to 21Shares from its newly established base in Luxembourg. This announcement follows the bank's launch of a trading service in mid-July, which allows institutions and corporations to trade major cryptocurrencies.
Mandy Chiu, 21Shares' global head of product development, described the collaboration as "an important milestone in our continued mission to bring institutional-grade infrastructure to the digital asset ecosystem." She highlighted Standard Chartered's strong reputation within traditional finance as a significant advantage.
"As one of the world’s most trusted financial institutions, Standard Chartered brings deep expertise in cross-border banking, risk management, and custody."
Other major banks are also making similar advancements in the crypto space. In September, US Bancorp, a multinational financial services firm, re-entered the crypto market by relaunching its digital asset custody services specifically for investment managers. This service was initially launched in 2021 but was later discontinued due to regulatory challenges.
Reports from mid-August indicated that Citigroup, a Wall Street giant, is considering offering cryptocurrency custody and payment services. Additionally, Germany's largest bank, Deutsche Bank, was reported in July to be planning to allow its clients to store cryptocurrencies, reflecting a wider trend observed within the German financial sector.
The Evolving Landscape of Crypto and Traditional Finance
This trend has sparked considerable discussion within the industry, as crypto-native institutions face increasing competition.
In October, Martin Hiesboeck, head of blockchain and crypto research at the crypto financial services platform Uphold, commented that large Bitcoin holders moving their assets into ETFs represents "another nail in the coffin of the original crypto spirit."
This sentiment followed remarks by Robbie Mitchnick, BlackRock's head of digital assets, who stated that the company had already facilitated over $3 billion in real Bitcoin to ETF conversions. He noted that holders recognize "the convenience of being able to hold their exposure within their existing financial adviser or private-bank relationship."