Northern Trust launches crypto custodian

Chicago-headquartered Northern Trust has entered into an agreement with Standard Charter’s venture capital unit SC Ventures to launch Zodia Custody, an institutional-grade custody solution for cryptocurrencies. “The introduction of digital custody backed by the know-how and experience of global banks is a breakthrough in the evolution and support of institutional cryptocurrency markets,” said Pete Cherecwich, president of Corporate & Institutional Services at Northern Trust. “Zodia’s robust capabilities will make it possible for institutional asset owners, family offices and asset managers to invest in a range of cryptocurrencies as interest continues to grow in these emerging and innovative financial instruments.” Zodia is expected to begin operations in London in 2021 upon regulatory approval. The aim is to provide custody services for the most-traded crypto assets -- Bitcoin, Ethereum, followed by XRP, Litecoin and Bitcoin Cash – which represent the majority of client demand and activity. In total, they account for approximately 80% of the total assets on the top exchanges or $395 billion. “Zodia was established to address the need for a cryptocurrency custodian that truly understands custody,” said Maxime De Guillebon, CEO of Zodia. “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.” The custodial solution is designed to allow institutions to invest in emerging cryptocurrency assets and will include transaction and settlement activities. Zodia combines traditional custody principles and the expertise of a bank with the agility of a fintech company, officials said. As the most widely recognized cryptocurrency, Bitcoin is trading at record highs and interest from institutional investors is on the upswing. However, large-scale investors only make up only 9% of the investments in crypto at present, according to figures cited by Northern Trust. Cryptocurrencies generally are forecast to continue to grow with a CAGR of 32% from 2019 to 2024, according to a report published earlier this year.

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