UK bank Standard Chartered is setting up a cryptocurrency exchange as rival HSBC decides not to offer digital currencies to clients | Currency News | Financial and Business News
- Standard Chartered will launch a cryptocurrency exchange and brokerage joint venture, the UK bank said Wednesday.
- The JV with BC Technology Group is aimed to serve institutional and corporate clients.
- The move by StanChart comes shortly after rival HSBC said it wouldn't offer clients access to cryptocurrencies.
- See more stories on Insider's business page.
Standard Chartered will launch a digital asset exchange and brokerage service, with its announcement Wednesday coming shortly after the head of rival lender HSBC saying it would not expand into cryptocurrencies.
SC Ventures, a unit of StanChart, will establish the services for institutional investors and corporate clients in the UK and Europe along with BC Technology Group, which runs the cryptocurrency exchange OSL that's licensed in Hong Kong.
The joint venture will be based in the UK and is aimed at giving clients access to deep pools of liquidity in bitcoin, ethereum and other crypto assets.
"We have a strong conviction that digital assets are here to stay and will be adopted by the institutional market as a highly relevant asset class," Alex Manson, head of SC Ventures, said in a statement. The JV could be launched in the fourth quarter of 2021.
The move comes as other financial institutions expand into the crypto market whose market capitalization has swelled to $1.7 trillion, although a massive selloff in the space in May pulled the market cap below $2 trillion.
Goldman Sachs launched a cryptocurrency trading desk and Morgan Stanley became the first major US financial firm to offer access to Bitcoin funds. While StanChart gears up its crypto dealings, HSBC boss Noel Quinn last week said his company had no plans of initiating a crypto desk nor offering cryptocurrencies to clients.
"Given the volatility, we are not into bitcoin as an asset class," Quinn told Reuters.
SC Ventures in December teamed up with Northern Trust, a wealth management firm based in Chicago, to launch crypto custody service Zodia Custody. The London-based operations, upon regulatory approval, would provide custody services for bitcoin and ethereum, followed by XRP, litecoin, and bitcoin cash.
StanChart in 2020 invested in Metaco, a digital asset infrastructure provider, and is working with the Bank of Thailand and the Hong Kong Monetary Authority to explore distributed ledger interoperability for cross-border fund transfers.
Usman Ahmad, the chief information officer of BC Group, will be the CEO of the new joint project with SC Ventures.
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