Zodia Custody Introduces Staking Option for Crypto Holdings
Zodia Custody, owned by Standard Chartered, has launched a staking option called “Zodia Custody Yield” in collaboration with DeFi platform OpenEden. This service allows users to earn returns on their stablecoin holdings while claiming to prioritize cybersecurity. However, the details of their cybersecurity measures are not fully disclosed.
Zodia Custody’s Bullish Stance on Crypto
Standard Chartered has positioned itself as a bullish financial institution in the crypto space. The bank predicted that Bitcoin could reach $50,000 by 2023 and potentially hit $120,000 next year. Zodia Custody, a joint venture between Standard Chartered and Northern Trust, has raised $36 million from investors and expanded into the Japanese market through a partnership with SBI Digital Asset Holdings.
Japan’s Crypto-Friendly Environment
Choosing to expand into Japan is strategic due to its favorable fintech and crypto regulations. The country recently passed a law allowing startups to issue cryptocurrency instead of stock and expanded the scope for stablecoin transactions. This makes Japan an attractive market for Zodia Custody’s services.
“There are billions of dollars worth of stablecoins sitting on the sidelines when they could easily be generating yields for investors,” said Jeremy Ng, co-founder of OpenEden.
Trending Movement in Financial Institutions
Zodia Custody’s announcement aligns with a growing trend among financial institutions. Citi Treasury and Trade Solutions recently partnered with Maersk to offer services that convert funds into digital assets, enabling instant payments regardless of business hours. Additionally, several asset managers, including BlackRock and Invesco, are awaiting regulatory approval for their spot Bitcoin ETF applications.
Challenges for BlackRock’s ETF Approval
Although the approval of BlackRock’s spot Bitcoin ETF is anticipated by many, the asset manager faces obstacles. The firm has faced scrutiny from US regulators over its China ties and criticism from politicians who prioritize returns over environmental, social, and governance (ESG) criteria.
Hot Take: Financial Institutions Embrace Crypto
Financial institutions like Zodia Custody are recognizing the potential of cryptocurrencies and blockchain-based products. They are offering innovative services to attract institutional investors and cater to the growing demand for crypto-related solutions. While regulatory challenges persist, these institutions are pushing forward in their pursuit of integrating digital assets into their financial strategies.
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