British multinational services company Standard Chartered PLC (LSE: STAN) is planning to launch a crypto custody service for Bitcoin (BTC) and Ethereum (ETH) to institutional clients in Dubai, UAE. The service will be available as soon as the first quarter of 2024. In addition, the bank has ambitious plans to establish a cryptocurrency settlement network.
Standard Chartered marked its presence in the UAE back in 1958 when it opened its first branch in Sharjah. The company’s business gradually increased in the UAE with the opening of several branches. In 2006, Standard Chartered became the first bank within the DIFC to purchase its own premises. Nowadays, Dubai is the Bank’s regional hub for the Africa and Middle East region and is the center for its Islamic Banking arm, Standard Chartered Saadiq.
Earlier this year, Standard Chartered signed a memorandum of understanding (MoU) with Dubai International Financial Centre (DIFC) to collaborate on digital assets, including digital asset custody. Now that Standard Chartered has obtained the regulatory approvals required, the announcement about the crypto custody is official and the timeframe is set.
Waqar Chaudry, executive director of innovation at Standard Chartered, commented:
“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 custody service will be operated by Zodia Custody – the leading institution-first digital asset custodian by Standard Chartered. Notably, Zodia Custody was granted In-Principle Approval (IPA) to operate as a cryptocurrency broker-dealer in Abu Dhabi’s over-the-counter (OTC) market.
New Crypto Hubs
Standard Chartered has opted for the UAE for a reason. The regulatory scrutiny in the US is getting tense, and many companies operating in the crypto industry and offering crypto-related services are considering other locations for moving their offices. In the UAE, digital asset adoption and financial regulation are tolerant. The country has maintained a favorable environment for its digital asset industry growth via its UAE Blockchain Strategy 2021. Moreover, with its balanced regulatory approach, the UAE successfully attracts crypto companies to boost its economy.
Waqar Chaudry stated:
“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.”
With the license of the UAE, Standard Charted will be able to offer its custody services all over the world.
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