Global banks continue to expand their cryptocurrency-related capabilities, with British multinational bank Standard Chartered raising new funding for its Zodia cryptocurrency platform.
Standard Chartered-backed crypto custody subsidiary Zodia Custody has raised $36 million in a new series A funding round, Bloomberg reported on April 27.
Japanese financial conglomerate SBI Holdings has led the fundraising, reportedly becoming Zodia's second-largest shareholder, Zodia Custody CEO Julian Sawyer said.
Prior to the funding round, London-based Zodia was backed exclusively by Standard Chartered and Northern Trust, with Standard Chartered holding a 90% stake in the company. It is still the majority shareholder after the fundraiser, according to Sawyer.
The Zodia CEO emphasized that it is typical of Standard Chartered companies' strategy to raise external funds after a subsidiary grows to a certain level, stating:
“It is part of our strategy to be backed by banks and all the good things that that brings,” he said. "That doesn't mean there has to be just one bank."
With new funding, Standard Chartered's Zodia plans to increase the number of supported cryptocurrencies, including staked Ether (ETH).
The firm will also channel the newly raised funds for geographic expansion beyond its current markets in Europe and Asia. The firm is particularly interested in opportunities in the Middle East, but plans to stay away from the United States due to regulatory uncertainty.
Sawyer noted that there is a major lack of clarity regarding which cryptocurrencies should be considered securities in the United States. “We hope the US creates that clarity, but at the moment, it is fair to say that it is difficult to see what it will be in the next 12 to 18 months,” added the CEO.
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The news comes shortly after Zodia. expanded its business in Japan through a joint venture with SBI Holdings in February 2023. Like Zodia's global division, its Japanese spin-off targets institutional investors only. The joint venture is 51% owned by SBI's crypto team, SBI Digital Asset Holdings, and 49% owned by Zodia Custody.
One of the largest banks in the UK, originally Standard Chartered announced plans to provide institutional custody for cryptocurrencies like Bitcoin (BTC) in 2020. Launched in 2021, Zodia has survived the 2022 crypto bear market and the main industry collapses like FTX and Celsius.
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