Standard Chartered is planning to reabsorb the client-facing custody operations of Zodia Custody into the digital assets division of its Corporate and Investment Bank (CIB).
The restructuring, which could be announced as early as this month, would leave Zodia operating only as a standalone Software-as-a-Service (SaaS) platform for custody technology, according to Bloomberg sources familiar with the matter.
From Incubation to Independence to Reabsorption
Standard Chartered established Zodia Custody in late 2020 through its innovation arm SC Ventures, alongside Northern Trust.
The custodian later attracted minority investors, including SBI Holdings, National Australia Bank, and Emirates NBD. It now employs around 150 people across seven offices globally.
Zodia had been gaining traction. In January 2026, it became the first custodian to support AUDM, an Australian dollar stablecoin.
The following month, it launched Zodia Switch, enabling clients to swap assets directly within the custody platform without external pre-funding.
However, Standard Chartered launched its own Luxembourg-based digital asset custody last year and rolled out institutional crypto trading separately.
The overlap between parent and subsidiary made a restructuring likely.
It remains unclear whether Standard Chartered has consulted Zodia’s minority shareholders.
Banks Are Pulling Custody In-House
The digital asset custody market currently exceeds $1 trillion and is projected to reach $7 trillion by 2035 at a compound annual growth rate of roughly 23.7%.
According to the 2026 EY-Parthenon survey, 73% of institutional investors plan to increase digital asset allocations this year.
That growing demand is pulling banks deeper into direct custody. State Street and BNY Mellon have scaled internal digital custody divisions.
Morgan Stanley filed for a dedicated national trust bank charter in February to custody and stake crypto assets under federal supervision.
Analysts see the restructuring as a turning point, with some arguing that when a Tier-1 global bank moves crypto custody into its investment bank, it stops being a contest between crypto and TradFi and becomes crypto embedded inside TradFi.
Zodia was originally built as a standalone vehicle to test the waters safely, and its reabsorption only happens when the parent sees digital assets as real, fee-generating capital markets business.
Meanwhile, others suggest a wider pattern of traditional banks pulling digital asset functions from experimental ventures into core regulated operations, noting that running parallel services was simply inefficient.
“…The suits finally realized running the same thing twice is inefficient. Revolutionary,” one user stated.
What This Says About Crypto Custody Independence
The answer appears increasingly clear. Independence for bank-backed custodians served a specific purpose during the experimental phase of 2020-2023, when regulatory uncertainty made arm’s-length structures necessary.
Now that frameworks like MiCA in Europe and the GENIUS Act in the US have reduced that friction, banks no longer need buffer entities to engage with digital assets.
“This mirrors a wider trend of traditional banks pulling digital asset functions from experimental ventures into core regulated ops – driven by frameworks like MiCA and VARA,” the user added.
Zodia’s hybrid outcome is telling. The technology retains standalone value as SaaS, but the actual safekeeping of client assets, the highest-trust and highest-margin piece of the value chain, moves back onto the parent bank’s books.
That distinction reveals what banks truly want to own versus what they are willing to license out.
Crypto-native custodians like Coinbase Custody, BitGo, and Fireblocks still hold nearly half the global market.
Can they defend that share against a banking sector now determined to bring custody in-house?
The post Standard Chartered is Taking Over Full Crypto Custody Platform Zodia appeared first on BeInCrypto.
Source: https://beincrypto.com/standard-chartered-zodia-custody-integration-tradfi-2/
Be the first to comment