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Standard Chartered has formally introduced its digital asset custody service in the United Arab Emirates (UAE). Based in the UAE and regulated by the Dubai Financial Services Authority (DFSA), DIFC will offer this new service.
To kick-start the service, it will only accommodate Bitcoin and Ethereum due to their dominance in the market.
Standard Chartered Expands Crypto Services in UAE
The UAE, being among the leading and progressive countries in the digitization of finance, was selected for this launch. Standard Chartered noted the country’s enabling legal framework, is ideal for advancing cryptocurrency.
The launch marks the UAE’s strategic goal of positioning itself as a world powerhouse in the digital finance industry. According to Standard Chartered, institutional clients across the region are need of a regulated custody service provider for digital assets.
This service will be significant given the increasing demand for storing cryptocurrencies by offering a secure platform for this purpose. This move comes in the light of the growing adoption of digital assets across global financial institutions.
Institutional Adoption of Crypto Gains Momentum
Standard Chartered is one of the banks that has been working towards expanding its offerings in the crypto space. In June 2023, the bank opened a Bitcoin (BTC) and Ethereum (ETH) trading desk for institutional investors.
It has also made strategic collaborations with Web3 company Animoca Brands and Crypto.com. This is done to expand the firm’s position in digital assets. Brevan Howard Digital Asset, the cryptocurrency arm of British hedge fund, Brevan Howard is the first client of the new service.
This move is another sign of the increase in institutional adoption of crypto as a genuine investment asset class. It will be imperative to fulfill the needs of institutions that need robust and secure storage solutions.
UAE Ranks High in Global Crypto Adoption
Standard Chartered Bank is set to offer the same custody service in other financial markets in the coming months. The bank, for instance, is also exploring the possibility of expanding its digital asset portfolio to include more cryptocurrencies. This expansion aligns with the bank’s strategic plan to be one of the leading providers of digital asset services.
The UAE’s position in the Henley Crypto Adoption Index 2024 proves its support for developing new technologies. The UAE comes third in the global index of digital asset adoption after Singapore and Hong Kong. This environment has drawn financial institutions like Standard Chartered to venture into the fast-growing crypto market.
The entry of Standard Chartered in the digital asset custody space is timely. As the need for regulated solutions increases, the bank’s service will likely be of interest to more institutional clients. It is hoped that this step will enhance confidence in the safety of digital assets in the area.
UAE Policies Drive Crypto Adoption Growth
Due to the policies implemented by the UAE, the adoption of cryptocurrencies has been made easy. The launch of Standard Chartered’s custody service is an indication of the country’s dominance in digital financial services.
This stands in line with Dubai’s approach towards digital assets. The same is apparent in DFSA’s regulatory approach and the DIFC’s support for financial innovation. The bank has also taken other strategic steps in the crypto sphere. For instance, it has joined Hong Kong Monetary Authority’s stablecoin sandbox.
In August 2023, it partnered with Crypto.com to enable fiat processing in over 90 countries, UAE being the first. These steps show the bank’s willingness to increase its reach in the digital asset markets.