On September 10, Standard Chartered announced the commencement of its digital asset/crypto custody services in the United Arab Emirates.
The service is located in the Dubai International Financial Centre (DIFC) and was granted a license by the Dubai Financial Services Authority (DFSA).
It will initially support Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization.
The UAE’s increasing status as a global leader in digital finance reflects its recognition of its balanced approach to digital asset adoption and regulation. Some predict that it will become the center of crypto in the future years.
Standard Chartered’s Crypto Custody Initiative
Standard Chartered has achieved a substantial milestone with the announcement on September 10. This action is predicated on the memorandum of understanding executed in May 2023 between the bank and DIFC, which established the foundation for the custody service.
Brevan Howard Digital, the cryptocurrency division of the hedge fund Brevan Howard, has been designated as the inaugural client of the new service.
The UAE was selected as the launchpad because of its proactive approach to digital finance, which includes favorable regulatory conditions.
As per Standard Chartered, the service will offer institutional clients a secure solution to safeguard their digital assets and address the growing demand for regulated custody solutions in the region.
UAE’s Contribution to Digital Finance: Service Expansion
Standard Chartered’s entry into the digital asset custody sector is a component of a more comprehensive strategy to broaden its cryptocurrency services.
The bank intends to expand the purview of its custody offerings in the upcoming months, potentially broadening the selection of digital assets and expanding these services to other significant financial markets.
This is consistent with the bank’s previous initiatives, including establishing a Bitcoin and Ether trading desk for institutional clients in June 2023.
The UAE’s designation as the initial point of departure for this initiative indicates its leadership in adopting digital assets.
The UAE is ranked third globally in the Henley Crypto Adoption Index 2024, slightly behind Singapore and Hong Kong. The high scores in economic factors, innovation, and technology are the reasons for this ranking.
This environment has rendered the UAE an appealing destination for financial institutions seeking to establish a presence in the industry.
The custody service’s inauguration continues Standard Chartered’s strategic initiatives in the crypto sector, including partnerships with Web3 firm Animoca Brands and Crypto.com. These partnerships aim to increase the bank’s digital asset offerings and broaden its sector influence.
In July 2023, the bank became a member of the stablecoin issuer sandbox of the Hong Kong Monetary Authority. It partnered with Crypto.com in August to offer fiat services in more than 90 countries, commencing with the United Arab Emirates.
Standard Chartered’s digital asset custody service acknowledges the critical need for secure and regulated solutions and reflects a growing institutional interest in crypto.