Bloomberg cited sources as saying that Standard Chartered Bank is establishing a spot trading platform for bitcoin and ethereum.
2 min readBloomberg reported that people familiar with the matter revealed that Standard Chartered Plc is setting up a Bitcoin and Ethereum trading platform, becoming one of the first global banks to enter spot cryptocurrency trading.
Risk hedging for cryptocurrency banking products is strict
A new cryptocurrency trading platform will soon go live and become part of a foreign exchange trading bank, two people familiar with the matter said, asking not to be identified discussing private information. The trading platform will be run from London, according to one of the people.
Banks including Goldman Sachs Group Inc. have been trading cryptocurrency derivatives for years, but strict regulations prevent them from directly trading the underlying assets. The Basel Committee on Banking Supervision has recommended that banks apply a risk weight of 1,250% to any unhedged cryptocurrency exposure, making it harder to turn a profit.
“We are working closely with regulators to support institutional client demand for Bitcoin and Ethereum trading, consistent with our focus on supporting clients across the broader digital asset ecosystem, from access and custody to tokenization and interoperability strategy,” Goldman Sachs said in a statement by e-mail.
Standard Chartered Bank has explored the crypto space during dark times
Standard Chartered is one of several major banks diving deeper into the cryptocurrency space as institutional adoption of the asset class continues to expand. He holds stakes in two cryptocurrency companies, Zodia Custody and Zodia Markets, which offer a variety of services from custody to over-the-counter trading.
In November last year, Standard Chartered launched a blockchain unit called Libeara to help institutions tokenize traditional assets. The ministry supports the creation of a tokenized government bond fund using Singapore dollars.
The move by Standard Chartered comes amid a slide in bitcoin, which has fallen more than 20% since the start of 2024, reflecting changes in the stock market and a squeeze on the trading platform’s profits. However, the successful launch of a US Bitcoin exchange-traded fund (ETF) in January this year has increased liquidity in the cryptocurrency market and given large institutions more confidence to enter the digital asset.
