A view of the Standard Chartered bank in Singapore, May 3, 2023.
Caroline Chia | Reuters
Zodia Custody, a company that assists large institutions in storing their cryptocurrencies, officially launched in Singapore on Tuesday, aiming to capitalize on the rapidly growing digital asset market in the country.
In a press release, Zodia announced that it is the first entity owned by and partnered with banks to provide digital asset custody services to financial institutions in Singapore.
Zodia operates as a subsidiary of Standard Chartered, a British bank well-established in emerging markets such as Asia, Africa, and the Middle East. The launch of Zodia in 2021, alongside Northern Trust, demonstrated the interest of major institutions in engaging with digital currencies. Zodia also receives partial ownership from SBI Digital Asset Holdings, the crypto division of Japanese bank SBI, and as part of their agreement, SBI will also launch its custody business in Japan.
With growing demand from institutions for bank-grade custody of digital assets and the existing clientele in the region, Zodia aims to expand across the Asia-Pacific region.
Zodia CEO Julian Sawyer spoke to CNBC, stating that Singapore is on the cusp of reaching the next level of maturity in terms of cryptoasset regulations and the development of central bank digital currencies. He emphasized that Zodia wants to be a part of the thriving Singapore market and believes a bank-owned custodian is exactly what the market needs.
Zodia’s client base includes hedge funds, high-frequency traders, prime brokers, exchanges, and asset managers.
According to Sawyer, Standard Chartered’s well-respected brand in Singapore has significantly boosted conversations with major financial firms. He stressed the importance of being associated with Standard Chartered in every discussion, as it provides credibility, risk management, compliance frameworks, information security, and resilience.
Singapore has witnessed rapid growth in digital asset adoption, surpassing the global average with a 19% crypto ownership rate, according to market research firm Statista.
Despite a bear market experienced by the crypto industry following the collapse of prominent names like FTX, Three Arrows Capital, and Terra, funding for crypto companies in Singapore remains robust.
Based on KPMG’s Pulse of Fintech report for the second half of 2022, Singapore’s fintech investment spotlight was on crypto or blockchain, receiving $1.2 billion in funding. However, it did see a 21% decline in crypto-related funding. Globally, crypto startups raised $23.1 billion in 2022, a 23% decrease compared to the previous year.
Zodia’s expansion into Singapore follows its recent move into Abu Dhabi, where the company secured in-principle regulatory approval. By leveraging Abu Dhabi’s crypto-friendly regulatory environment and its status as a financial center, Zodia aims to take advantage of the opportunities available in the United Arab Emirates capital.
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