Zodia Custody, owned by British financial powerhouse Standard Chartered, has announced its entry into the Hong Kong market. This move comes as part of the company’s deliberate foray into the Asia-Pacific region, aiming to capitalize on the increasing institutional demand for secure cryptocurrency storage solutions.
Meeting institutional demand in Hong Kong
Julian Sawyer, CEO of Zodia, exclusively told CNBC that the firm sees Hong Kong as an ideal marketplace, given its unique financial landscape. Moreover, the Hong Kong government and regulators view digital assets positively, aiming to establish the city as a future digital asset hub. Hence, Zodia’s launch in the city aligns perfectly with local policy sentiments and existing market demand.
Zodia has already expanded its services to Japan, Singapore, and Australia in recent months, showing a strategic interest in the Asia-Pacific market. Additionally, apart from Standard Chartered, Northern Trust and Japan’s SBI Holdings also share ownership stakes in the firm. These collaborations exemplify a shared vision among established financial institutions about the rising importance of secure cryptocurrency custody services.
Regulatory inroads and phased launch
Hong Kong’s warm approach to digital assets sharply contrasts with the broader anti-crypto stance from China, which imposed a comprehensive ban on bitcoin trading and mining last year. The Hong Kong Securities and Futures Commission (SFC) has initiated a new regulatory framework for digital assets, allowing companies to apply for registration and offer services in a controlled environment. However, it is worth noting that, to date, only OSL Digital and Hash Blockchain have secured licenses from the SFC.
In sync with this regulatory openness, Zodia plans to implement its expansion in Hong Kong in stages. Initially, the company will provide a limited set of crypto assets for Hong Kong clients. Zodia is also actively engaging with the SFC and Hong Kong Monetary Authority regarding the possibility of becoming a regulated entity in Hong Kong’s financial district.
While Zodia’s comprehensive approach to the Asia-Pacific region includes Japan, Singapore, and Australia, Hong Kong represents the final frontier in its current expansion plan. Zodia aims to strategically position itself as a dominant player in the institutional crypto storage space, offering its bank-grade cold wallet storage solutions to a wider range of clientele across varied jurisdictions. By entering the Hong Kong market, Zodia not only taps into an existing institutional demand but also aligns itself with Hong Kong’s regulatory landscape, which is increasingly conducive to digital asset services.