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Japan’s SBI Holdings Buys Into Standard Charter’s Zodia Crypto Custody

The financial services firm led a $36 million series A funding round to become Zodia’s second-largest shareholder. The money will fund geographic expansion, increased token coverage and enhancements to its settlement product, Interchange.

Zodia custody by standard chartered bank

Japanese financial services conglomerate SBI Holdings has led a series A funding round attracting $36 million into British multinational bank Standard Chartered’s spin-off crypto custodial unit, Zodia Custody, according to a report by Bloomberg.

The investment dilutes Standard Chartered’s previous 90% ownership of the company, and makes SBI the second largest shareholder, according to Zodia Chief Executive, Julian Sawyer, although Standard Chartered remains the majority owner.

A portion of the funds will support the geographic expansion of the firm beyond its current markets in Europe and Asia, with Sawyer expressing particular interest in opportunities in the Middle East. Zodia expanded its Japanese business in a joint venture with SBI Holdings back in February and registered as a crypto-custodian with Luxembourg regulators in March.

However, there are no immediate plans to expand into US markets due to the country’s regulatory uncertainly, as Sawyer explained: “As an industry there’s a challenge in terms of which regulatory body is managing crypto, and what assets are classed as securities. We hope the US creates that clarity, but at the moment, it’s fair to say that it’s difficult to see what that will be in the next 12 to 18 months.”

Some of the funding will also be used to increase the number of digital assets supported by Zodia Custody, including the addition of support for staked Ether, due to high demand following the recent Shanghai/Shapella upgrade.

The rest of the funds are earmarked to enhance Zodia’s settlement product, Interchange, which gives protection to clients’ assets when they are traded on exchanges.

Standard Chartered was in the news earlier this week for its bullish prediction on bitcoin. According to a recent note to investors, the price of bitcoin was tipped to reach $100,000 by the end of 2024, with several factors contributing to its appeal.

Firstly, the note suggested that the crypto winter had already finished and that Bitcoin will now benefit due to its status as a safe haven, particularly in the fallout of the recent US banking crisis. Other bullish indicators include improved profitability of crypto miners leading to hodling of mined coins, and the upcoming bitcoin halving in 2024 cutting the supply in half.

Will Zodia encourage more institutional investors to enter the digital assets marketplace? Will bitcoin get to $100,000 by the end of 2024? We’ll be Observing, and we’ll let you know.