On September 10, Standard Chartered announced its entry into the fast-growing digital assets space in the UAE, receiving regulatory approval to launch crypto custody services in UAE. The move, approved by the Dubai Financial Services Authority (DFSA), positions the multinational bank as a key player in the rapidly expanding world of cryptocurrency custody.
The financial giant, with a strong global presence, will initially provide custodial services for Bitcoin (BTC) and Ethereum (ETH) the two largest cryptocurrencies by market capitalization. However, Standard Chartered’s ambitions don’t stop there. The bank has plans to expand its crypto custody services in UAE to include a broader range of digital assets, aiming to make the UAE a leading crypto hub.
This development marks a major milestone in Standard Chartered’s strategy to enhance its digital asset offerings and establish a foothold in a jurisdiction increasingly recognized for its crypto-friendly regulations.
Strong Institutional Backing
Standard Chartered’s digital asset custody service in the UAE is being rolled out in partnership with Brevan Howard Digital, the cryptocurrency division of Brevan Howard, a major hedge fund. The partnership underscores the bank’s commitment to offering institutional-grade crypto custody services in UAE, catering to high-net-worth clients, institutional investors, and corporate treasuries.
The foundation of this service was laid months earlier, on May 10, 2023, when the bank signed a memorandum of understanding with the Dubai International Financial Centre (DIFC). The DIFC, a special economic zone known for its robust regulatory framework, played a crucial role in securing the necessary approvals from the DFSA, the dedicated financial regulator of the DIFC.
A Significant Leap for the Custody Business
In a press release, Standard Chartered’s Group Chief Executive Bill Winters emphasized the importance of the DFSA approval in advancing the bank’s crypto custody services in UAE. “We are entering the next phase of the custody business with this new digital asset service. The UAE presents a strategic market for us, and we believe in the long-term potential of digital assets,” Winters said.
Winters’ remarks highlight the bank’s long-term commitment to cryptocurrency and digital assets, positioning Standard Chartered as one of the leading traditional financial institutions to embrace the evolving world of blockchain and crypto. As the bank ventures into crypto custody services in UAE, it aims to leverage the country’s increasing adoption of blockchain technology and cryptocurrency.
UAE’s Rising Influence in Crypto Adoption
The UAE has emerged as a leading player in the global cryptocurrency scene, thanks to its progressive regulatory environment and significant adoption of digital assets. According to consultancy firm Henley & Partners’ 2024 Crypto Adoption Index, the UAE ranks third globally, following Singapore and Hong Kong, with a score of 41.8. The country ranked highly on factors such as economic innovation and technology, making it an attractive destination for companies like Standard Chartered to launch crypto custody services in UAE.
This favorable business environment has encouraged global financial institutions, such as Standard Chartered, to view the UAE as a gateway to a broader audience of crypto enthusiasts and institutional investors. With DFSA’s approval, the bank now has the green light to offer secure and compliant crypto custody services in UAE, setting a precedent for other financial institutions considering similar moves.
Expanding Beyond Bitcoin and Ethereum
While the crypto custody services in UAE will initially focus on Bitcoin and Ethereum, Standard Chartered is looking to diversify its offerings. The bank plans to extend its custody services to other types of digital assets and explore partnerships with financial institutions in other major hubs like Hong Kong, Singapore, and Switzerland.
“Bitcoin and Ethereum are just the starting point,” Winters noted. “We are working on expanding our services to include a variety of digital assets to meet the diverse needs of our clients.” This approach reflects Standard Chartered’s broader ambition to not only lead in crypto custody services in UAE but also to set a global standard for secure and reliable digital asset custody.
A Growing Presence in the Crypto Space
Standard Chartered’s foray into crypto custody services in UAE is not the bank’s first venture into the cryptocurrency world. On July 18, 2023, the bank partnered with Web3 firm Animoca Brands to participate in the Hong Kong Monetary Authority’s stablecoin sandbox, showcasing its dedication to exploring blockchain technology and digital currencies.
In another significant move, Standard Chartered partnered with Crypto.com on August 29, 2023, to provide fiat services to over 90 countries, with the UAE as a key market. The partnership enables users of the exchange to deposit and withdraw U.S. dollars, United Arab Emirates dirhams, and euros, solidifying Standard Chartered’s reputation as a major player in the UAE’s burgeoning cryptocurrency ecosystem.
The Future of Crypto Custody in the UAE
As Standard Chartered’s crypto custody services in UAE take off, the country is set to cement its status as a top-tier destination for digital asset innovation and investment. The bank’s partnership with Brevan Howard Digital and its close ties to the DIFC will likely encourage other financial institutions to follow suit, creating a more competitive and dynamic market for crypto custody in the region.
With the DFSA’s stamp of approval and the UAE’s proactive stance on crypto regulation, the future looks promising for Standard Chartered’s crypto custody services in UAE. As the bank continues to expand its offerings, the UAE is poised to become a central hub in the global digital asset ecosystem.
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