Standard Chartered may bring Zodia Custody functions in-house

Standard Chartered is conducting a review of whether to move some operations from Zodia Custody into the bank’s core custody and securities services units, according to people familiar with the discussions. Under the review, certain custody tasks would be transferred into Standard Chartered while other activities would remain in the standalone Zodia entity.

People close to the talks indicate the review is at an early stage and no final decision has been reached. The assessment is part of a broader look at how to serve institutional clients and how digital-asset custody fits with the bank’s existing custody and prime-brokerage offerings.

Zodia Custody was created as a specialist custodian for cryptocurrencies and tokenized assets to provide institutional investors with regulated safekeeping. Standard Chartered is a principal backer of Zodia and has used the business to offer clients a custody option separate from the bank’s traditional custody services. The bank is headquartered in London and operates digital-asset services across Asia, Europe and the Americas.

Officials and advisers are examining which functions could be absorbed without disrupting client relationships or service continuity. Areas under consideration include core custody infrastructure, client onboarding and middle-office functions. Any transfer would require internal planning and regulatory engagement in the jurisdictions where Zodia operates.

Bringing functions in-house could allow the bank to consolidate oversight, risk controls and client reporting within existing frameworks, while integration would likely require systems work and additional licensing in some markets. Client preferences for an independent specialist custodian versus a bank-owned solution will factor into decisions.

No timetable has been announced. People involved in the discussions indicate options under consideration include partial integration, continued partnership arrangements or retaining the current structure. Bank management will assess operational, regulatory and contractual risks, including potential impacts on staff, vendors and partners.