UK-based Zodia Custody, a digital asset custodian supported by Standard Chartered, has recently extended its services to Hong Kong, marking a significant expansion in the Asia-Pacific region, according to a CNBC report. Established in 2020, Zodia Custody specializes in providing secure investment opportunities in cryptocurrencies, primarily catering to institutional clients such as corporations and professional investors.
The decision to expand into Hong Kong was driven by the substantial demand for crypto assets, especially from institutional entities rather than individual retail customers, as per Julian Sawyer, Zodia’s CEO.
The Hong Kong government and the regulators see digital assets as the future and also want Hong Kong to be a hub. What we’re seeing is there are absolutely clients in all of those four markets who want to do things. We also see a lot of other clients and prospects outside those four jurisdictions that want to come in on the institutional side.
Hong Kong’s robust market appetite for cryptocurrencies, coupled with a progressive stance from the government and regulators, made it an ideal destination for Zodia’s expansion efforts. The Hong Kong authorities view digital assets as integral to the future financial landscape and are keen on establishing the city as a hub for such innovations.
Zodia Custody’s expansion into Hong Kong is part of its proactive approach in the Asia-Pacific region. In recent months, the company has extended its services to countries such as Japan, Singapore, and Australia. Importantly, Zodia Custody is not undertaking this expansion journey alone; it has formed strategic partnerships with well-established institutions like Standard Chartered, Northern Trust, and Japan’s SBI Holdings.
This expansion aligns with the backdrop of Hong Kong’s banking regulator urging major financial institutions, including HSBC and Standard Chartered, to consider embracing cryptocurrency exchanges as their clients. Although Hong Kong’s banks have not imposed outright bans on crypto clients, their cautious approach stems from concerns about potential legal consequences if these platforms are linked to money laundering or illicit activities.
Standard Chartered Under Regulatory Spotlight
Standard Chartered, being a significant player in Hong Kong, holds key positions as issuers of the city’s currency and within the Hong Kong Association of Banks lobby group. A spokesperson from Standard Chartered emphasized the bank’s ongoing dialogues with regulators on various topics.
Concurrently, Zodia Custody is engaging in discussions with both the Securities and Futures Commission [SFC] and the Hong Kong Monetary Authority to ensure regulatory compliance within the financial district. This signifies Zodia Custody’s dedication to operating within the bounds of regulations and maintaining a compliant business approach.