Standard Chartered Taps 21Shares for Custody: A Crypto Shift?

Standard Chartered Bolsters Digital Asset Services with 21Shares Partnership

Major banking group Standard Chartered has announced its selection of fund manager 21Shares as its digital asset custodian, in a move seen as a potential shift away from relying solely on crypto-native firms. According to a statement released by Standard Chartered, the bank will provide crypto custody services to 21Shares, which offers a range of exchange-traded products (ETPs) linked to cryptocurrencies. Margaret Harwood-Jones, the bank’s global head of financing and securities services, noted that the collaboration would enable them to "extend our expertise into the fast-evolving digital asset ecosystem."

Questions Raised About 21Shares' Previous Partnerships

Notably, 21Shares had previously partnered with crypto-native custodian Zodia Custody in late June 2024. Zodia Custody was co-founded by Standard Chartered in 2020 and operated as a wholly-owned subsidiary, suggesting that the bank was keen to avoid direct involvement in the crypto space at the time. It remains unclear whether Standard Chartered will take over Zodia Custody’s role, or if the two organizations will operate alongside each other. The move comes as more traditional financial institutions roll out crypto services, often leveraging their established reputations to gain an advantage over crypto-native competitors.

Traditional Finance Encroaches on Crypto Territory

Standard Chartered confirmed that 21Shares would be working with its newly established digital asset custody service based in Luxembourg. The announcement follows the bank’s mid-July launch of a trading service that enables institutions and corporations to trade major cryptocurrencies. Mandy Chiu, global head of product development at 21Shares, stated that the collaboration is "an important milestone in our continued mission to bring institutional-grade infrastructure to the digital asset ecosystem." She pointed to the bank’s reputation in traditional finance as an advantage. "As one of the world’s most trusted financial institutions, Standard Chartered brings deep expertise in cross-border banking, risk management, and custody."

Growing Trend of Traditional Finance and Crypto Integration

Other major banks have taken similar steps. In September, US multinational financial services firm US Bancorp re-entered the crypto space by relaunching its digital asset custody services aimed explicitly at investment managers. This follows the company’s launch of its custody service in 2021, which was subsequently shut down due to unfavorable regulations. Mid-August reports also noted that Wall Street giant Citigroup is weighing plans to offer cryptocurrency custody and payment services. In July, Germany’s biggest bank, Deutsche Bank, was also reported to be planning to allow its clients to store cryptocurrencies – amid a broader trend in the nation.

Reciprocal Changes Between Traditional Finance and Crypto

That trend has stirred debate within the industry, as crypto-native institutions face intense competition. In October, Martin Hiesboeck, head of blockchain and crypto research at crypto financial services platform Uphold, said that large Bitcoin (BTC) wallets moving their assets into ETFs is "another nail in the coffin of the original crypto spirit." The comment follows Robbie Mitchnick, BlackRock’s head of digital assets, saying that the company had already facilitated more than $3 billion worth of real Bitcoin to ETF conversions. He added that holders recognize "the convenience of being able to hold their exposure within their existing financial adviser or private-bank relationship." This development represents a significant step in the integration of digital assets into the traditional financial system, with implications for the future of the cryptocurrency industry.