Banking giant Standard Chartered has revealed plans to launch digital currency custody services for institutional clients as it makes a historical crossover from traditional finance.
Standard Chartered’s latest plans were contained in a memorandum of understanding (MoU) signed with the Dubai International Financial Centre (DIFC) that will see a collaborative effort from both entities. The MoU is still subject to approval from Dubai’s Virtual Assets Regulatory Authority (VARA).
Details obtained from the document disclose that Zodia Custody, a subsidiary of Standard Chartered, will primarily run the custody solution for digital assets. Fresh from its $36 million raise from SBI Holdings and SC Ventures, Zodia Custody is rippling with confidence that it will exceed the requirements of Dubai’s regulators.
“We see digital assets as an important part of the future of financial services and we are committed to investing in the infrastructure and talent necessary to be a leader in this space,” Bill Winters, Chief Executive Officer of Standard Chartered, said.
Custody service providers under Dubai’s new digital currency regulations are expected to separate customer funds from proprietary assets and possess a robust security architecture. To be issued operational licenses by regulators, digital currency custody firms must make regular disclosures to authorities on the size of their holdings and other pertinent details.
Dubai has been making efforts to diversify its economy from tourism, and details from the Emirate’s economic agenda lays bare an ambition to be a “top 4 global financial hub.” The creation of several free trade zones in the city and positive legislation have signaled Dubai’s intent to rival other leading jurisdictions like New York and Singapore.
“DIFC welcome collaboration with partners such as Standard Chartered to further accelerate growth, enable collaboration that triggers new innovation, as we continue to shape the future of finance together,” DIFC Governor HE Essa Kazim stated.
In 2006, Standard Chartered purchased an office complex within the DIFC to become the financial institution to set up shop in the center.
Dubai’s affinity with digital assets
Dubai has emerged as the leading hub for digital currencies over the last 12 months following the launch of a new legal regime to regulate the activities of service providers in the space. The new rules created a new regulatory watchdog and established clear processes for seeking registration within the city.
A handful of firms has since waded into Dubai to launch offices designed to serve customers in the Middle East and North Africa. Aside from its robust legal framework, the city’s administrators announced a metaverse strategy to create 40,000 virtual jobs before 2030 while adding $4 billion to the city’s GDP.
“The metaverse is a promising digital world. We aim to harness this technology to enhance the quality of life in the UAE and across the globe,” Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed, said at the time.
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