Northern Trust, a public financial services firm with a market cap of $19.4 billion, will be launching a joint platform, known as Zodia Custody, its first foray into cryptocurrency.
It’s been a huge year for institutions getting involved in the blockchain space, with companies such as MicroStrategy, Square, and PayPal all investing in cryptocurrency or offering crypto-based products on their platforms.
We can now add another big name to that list as Northern Trust launches a cryptocurrency custodial platform called Zodia. The partnership is a collaboration with SC Ventures, the venture unit of Standard Chartered.
In its official announcement, the solution is described as:
“Zodia combines the traditional custody principles and expertise of a bank with the agility of a fintech company to provide an infrastructure that meets the high standards and expectations of institutional investors through a platform that adapts to the changing needs of clients and the market.”
“Zodia was established to address the need for a cryptocurrency custodian that truly understands custody. We combine the risk management, compliance, governance, and security approach of a regulated financial institution with the cutting-edge innovation of crypto asset and key management technologies. By doing so, we enable operational efficiency and speed of transaction without compromising on security or reliability.”
More Legitimization in the Crypto Space
Northern Trust’s venture adds another layer of legitimization to the space. Many respect the financial services institution. The establishment of its new custody arm suggests that traditional financial organizations are finally seeing the disruptive potential of cryptocurrencies.
As more billion-dollar companies enter the emerging asset class, other institutions are likely to get more comfortable with the idea of investing in cryptocurrencies like Bitcoin.
Apart from its institutional ambitions, Standard Chartered elaborated on its Central Bank Digital Currency (CBDC) investments:
“Zodia further establishes Standard Chartered and Northern Trust as leaders in the development of digital-asset infrastructure. Alongside its partnerships with blockchain service providers, Standard Chartered has invested in core technology provider Metaco and is collaborating with the Bank of Thailand and the Hong Kong Monetary Authority to explore distributed ledger interoperability for cross-border fund transfers.”
Zodia Custody is reportedly still registering with the UK’s Financial Conduct Authority (FCA) to comply with Anti-Money Laundering (AML) regulations.