Standard Chartered Plans to Launch Cryptocurrency Custody Services in Dubai

Standard Chartered, has announced plans to introduce custody services for Bitcoin and ether in Dubai by the first quarter of 2024. Furthermore, the bank is in the final stages of securing In-Principle Approval to operate as a cryptocurrency broker-dealer in Abu Dhabi’s over-the-counter market. Earlier this year, Standard Chartered and DIFC entered into a memorandum of understanding (MoU) to collaborate on digital asset custody services.

Waqar Chaudry, the bank’s executive director of innovation, emphasized the extensive global reach of Dubai International Financial Centre (DIFC). According to him, DIFC’s robust regulatory framework enables the bank to expand its digital asset services to diverse jurisdictions. Consequently, Standard Chartered aims to surpass local offerings by obtaining regulatory approvals in various countries.

Chaudry further noted, “We have existing rails and settlement capability as well as service provision with other traditional custodians; we can service them, we can use them, they can use us. So that network effect will take hold pretty quickly after entities like us enter the market, rather than depending on a single bank network, unlike what recently failed institutions had built for the crypto market.”

The new custodial services will function under Zodia Custody, a venture supported by Standard Chartered Ventures. Notably, Zodia Custody has already established a commendable track record, having obtained approvals from regulators in the UK, Ireland, and Luxembourg. Recently, the company secured a $36 million investment led by SBI Holdings.

The United Arab Emirates (UAE) offers a favorable environment for financial institutions involved in digital assets. Bill Winters, the CEO of Standard Chartered, lauded the balanced regulatory approach of the UAE. Additionally, the bank has existing operational frameworks with traditional custodians, a factor expected to expedite the network effect once Standard Chartered ventures into the digital asset market.

Dubai is not a new territory for Standard Chartered. Ever since setting up its first branch in Sharjah in 1958, the bank has gradually expanded its presence in the region. Dubai now serves as the bank’s regional hub for Africa and the Middle East and is the base for Standard Chartered’s Islamic Banking arm, Standard Chartered Saadiq.

Zodia Markets’ entry into the UAE is particularly intriguing. With the growing prominence of the country in the digital asset industry, this move aims to facilitate the participation of institutional investors from the Middle East and Africa.

Chaudry remarked, “Back in 2018, when places like Singapore and the UAE were busy consulting on crypto assets, some other regions had not even made the distinction between a security and non-security status when it came to crypto assets. For that reason, now we see the difference in maturity in markets where countries like the UAE, Japan, Singapore, and Hong Kong are beginning to move faster.”

Standard Chartered’s calculated foray into the digital asset custody arena marks yet another significant milestone. In contrast to the regulatory hurdles faced by cryptocurrency firms in the United States, the UAE appears to provide a more conducive environment. As a result, this initiative could represent a pivotal moment not just for Standard Chartered but also for the adoption and regulation of digital assets in the global financial landscape.

The post Standard Chartered Plans to Launch Cryptocurrency Custody Services in Dubai appeared first on UNLOCK Blockchain.