Standard Chartered’s crypto custody spin-off, Zodia, has launched its operations in Hong Kong to meet the growing institutional demand for crypto services in the region. The move was announced in an exclusive report by CNBC on October 29, 2023.
According to the CNBC report, the platform will initially support a limited number of cryptocurrencies as it rolls out offerings, and it is in talks with Hong Kong’s financial regulators about obtaining official licensing and regulation status to operate in the territory.
Zodia’s CEO, Julian Sawyer, highlighted that this expansion into Hong Kong is driven by the growing interest of institutional investors in the city who seek exposure to digital assets. He emphasized that the demand in Hong Kong primarily comes from asset managers and funds, and it aligns with Zodia’s commitment to delivering secure, regulated custody solutions to institutional clients.
Sawyer also pointed out that the Hong Kong government envisions digital assets as integral to the city’s future and aims to position itself as a cryptocurrency hub in Asia. Thus, Zodia hopes to capitalize on the favourable crypto environment to serve the needs of local institutional investors.
Circle CEO Jeremy Allaire shared the same sentiment in June 2023 when his company announced plans to expand its services to the island. According to Allaire, Hong Kong is a promising hub for stablecoins and other digital assets. He added that the Asian market is particularly important for Circle’s growth strategy as Circle signifies a commitment to expanding its presence in the region. Allaire noted that despite mainland China’s ban on crypto trading, Hong Kong continues to receive support from Beijing.
Zodia has been aggressively expanding in Asia throughout the year. It launched its services in Japan, Singapore and Australia over recent months. Sawyer stated that the firm continues to see strong institutional demand for crypto across the region.
Meanwhile, the custody platform, which is also backed by Japan’s SBI Holdings and U.S.’s Northern Trust, raised $36 million in a Series A funding round in April 2023 to drive expansion plans.
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