Zodia Custody will now offer yield on digital assets to institutional clients in addition to providing its custody services.
Zodia Custody, a leading crypto custody platform owned by banking giant Standard Chartered, will start providing yield on crypto holdings owned by its institutional clients.
To bring this to fruition, Zodia Custody has partnered with OpenEden, a Singapore-based startup that brings real-world assets to the blockchain. Zodia Custody will use this partnership to connect digital assets held in custody by institutional clients to yield opportunities in the real world. Zodia has also said that the yield for institutional investors will include access to crypto staking.
By providing yield, Zodia Custody is exposing its clients to services that bring returns in a transparent, liquid, and low-risk manner. Speaking on the new development, Zodia Custody CEO Julian Sawyer explained that the company recognized benefits in the traditional market and was focused on bringing these benefits to its clients. He said:
“There’s a lot in the world of traditional finance that can be moved to digital assets. The challenge is how to bring some of the benefits to the world in a safe, compliant and regulatory-first way. Our first such partnership with OpenEden is exactly how we do this – by bringing access to yield products to our clients.”
OpenEden CEO Jeremy Ng also spoke on the partnership. According to Ng, billions of dollars worth of stablecoins could be generating yield for investors, but are instead sitting idle. Ng added that both Zodia Custody and OpenEden are combining their respective services to bring this “huge opportunity” to clients. Both companies are letting investors and issuers use tokenized financial products to enter the digital asset market.
Standard Chartered’s Zodia Custody Raised $36 Million Before Expanding to Yield Offer
Standard Chartered and Northern Trust launched Zodia Custody in 2021 and was one of 9 crypto asset businesses registered by the United Kingdom’s Financial Conduct Authority (FCA) at the time. In an announcement, Northern Trust said that Zodia Custody answers institutional investors’ desire for a crypto custodian that understands traditional custody while remaining flexible enough to adapt to the crypto market and meet investors’ standards.
In April, Zodia Custody raised about $36 million in a funding round led by Japanese financial giant SBI Holdings. The company said it plans to use the funds to increase its coverage of crypto assets. It also wants to improve Interchange, its settlement product that focuses on protecting client funds traded on exchanges.
Last week, Zodia Custody officially launched in Singapore to provide trustworthy crypto custody services in the country. According to CEO Sawyer, Zodia Custody wants to be a part of the market in Singapore. Sawyer also said Zodia believes the market in Singapore wants a “bank-owned custodian.” The crypto and blockchain industry in Singapore’s general financial investment sector has yielded promising results in recent times. According to a KPMG report for H2 2022, Singapore’s crypto and blockchain industry raised $1.2 billion in funding.
In August, the Monetary Authority of Singapore (MAS) published regulatory guidelines to direct the issuance and operations of stablecoins. The framework states that the MAS has regulatory authority over stablecoins issued in Singapore. It specifies that this includes stablecoins pegged 1:1 to the Singapore dollar or any G10 currency like the Pound, Euro, or US dollar.