Tuesday, July 23, 2024
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Zodia Custody, a company that helps large institutions store their crypto, launched in Singapore on Tuesday in a bid to tap into the country’s rapidly growing digital asset market.

The development makes Zodia the first entity that is owned by and partnered with banks to provide digital asset custody services for financial institutions in Singapore, Zodia said in a news release.

Zodia is a subsidiary of Standard Chartered, the British bank with a presence largely in emerging markets, such as Asia, Africa, and the Middle East. StanChart launched Zodiac in 2021 alongside Northern Trust, in a move that highlighted curiosity from big institutions in interacting with digital currencies. Zodia is also part-owned by SBI Digital Asset Holdings, the crypto division of Japanese bank SBI. As part of that deal, SBI also agreed to launch its custody business in Japan.

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

Singapore is “getting to that next level of maturity” in terms of forming rules for crypto assets and the development of central bank digital currencies, Zodia CEO Julian Sawyer said in a phone call. Sawyer was previously a co-founder of Starling Bank.

“Singapore is a market that has been no stranger to the crypto world for a long time,” Sawyer said. “We want to be part of it. We think that the market of a bank-owned custodian is actually what the market is wanting.”

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 its conversations with major financial firms. “Being part of Standard Chartered comes up in every single conversation,” he said. “It’s critical.”

“We adopt their risk their compliance frameworks, information security, resilience, [and] people managing,” he added.

Singapore has seen rapid growth when it comes to digital asset adoption. The city-state’s crypto ownership rate stands at 19%, according to market research firm Statista, higher than the global average of 15%.

Funding for crypto companies in Singapore has also remained strong despite a bear market the industry endured in the wake of the collapse of FTX, Three Arrows Capital, Terra, and various other previously prominent names.

Crypto or blockchain was the top area of fintech investment in Singapore in 2022, pulling in $1.2 billion of funding in 2022, according to KPMG’s Pulse of Fintech report for the second half of 2022. Crypto-related funding did still fall by 21%, however. Globally, crypto startups raised $23.1 billion in 2022, down 23% year-over-year.

Zodia’s move into Singapore comes on the heels of an expansion into Abu Dhabi. The company secured in-principle regulatory approval in Abu Dhabi earlier this month in a bid to take advantage of the United Arab Emirates capital’s crypto-friendly regulatory environment and status as a financial center.

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