Standard Chartered to Absorb Zodia Crypto Custody Unit

Standard Chartered is integrating Zodia Custody into its corporate banking division, marking a major shift in institutional digital asset management.

The deal, expected to close in the coming months, signals a new phase in the integration of crypto services directly into traditional banking.

According to reports from Bloomberg, Standard Chartered is planning a two-tier structure where the physical storage of client digital assets will transfer directly to the group’s corporate banking arm. This move will enable the bank to expand its own regulated crypto custody services in key markets, including the UK and Australia.

Parallel to this, Zodia Custody’s technological infrastructure and software platform will be spun off into a new independent company named Zodia Solutions. The new entity will operate as a “Software-as-a-Service” (SaaS) provider and will continue to be led by current CEO Julian Sawyer, while SC Ventures—Standard Chartered’s investment arm—will retain a majority stake.

Standard Chartered eliminates internal duplication

The transaction follows a period of increasing overlap between the bank’s operations and those of Zodia. Over the past year, Standard Chartered began establishing its own internal custody services in Luxembourg alongside institutional crypto trading operations. This effectively placed the bank in direct competition with its own subsidiary.

Integrating the custody business directly onto the bank’s balance sheet aims to eliminate these inefficiencies and centralize digital services under a single regulated structure.

Zodia Custody was originally launched as a separate platform by SC Ventures and Northern Trust at a time when regulatory uncertainty surrounding crypto assets forced major banks to keep such operations at arm’s length from their core balance sheets. Strategic investors including SBI Holdings, National Australia Bank, and Emirates NBD later joined the project.

These minority shareholders are now in discussions regarding whether they will maintain their stakes in the new SaaS entity, Zodia Solutions, following its separation from the custody business.

Banks no longer view crypto as an experiment

Analysts view the transaction as a significant indicator of how global banks’ attitudes toward digital assets have shifted. While institutions used separate structures like Zodia as “regulatory buffers” for crypto experiments between 2020 and 2023, the current environment is markedly different.

With the introduction of clearer regulatory frameworks, such as Europe’s MiCA and Dubai’s VARA rules, major banks are beginning to integrate crypto infrastructure directly into their core capital and custody operations.

This shift occurs as the global digital asset custody market exceeds $1 trillion, with industry forecasts suggesting potential growth to over $7 trillion within the next decade.

Standard Chartered’s move reflects a broader trend among global financial institutions. BNY, State Street, and Morgan Stanley are also accelerating the development of their own custody and tokenization platforms as they build the infrastructure necessary for institutional access to digital assets.

For Wall Street and global banks, cryptocurrencies are increasingly moving away from the realm of side experiments and toward the next phase of capital markets.