Standard Chartered Plc is poised to introduce a trading desk for Bitcoin and Ether, marking its entry into the direct trading of cryptocurrencies, according to sources familiar with the plans. This strategic move positions Standard Chartered among the pioneering major global banks to offer spot cryptocurrency trading services directly to clients.
The forthcoming trading desk will be integrated into the bank’s FX trading division and is expected to commence operations soon, with its base in London. While the bank did not provide specific details, sources requested anonymity due to the privacy of the information. Unlike other financial institutions such as Goldman Sachs Group Inc., which have dealt in cryptocurrency derivatives, stringent regulations have historically limited banks from engaging in direct trades of the underlying digital assets.
The Basel Committee on Banking Supervision’s guidelines recommend a 1,250% risk weighting to banks’ unhedged exposures to cryptocurrencies, which poses significant profitability challenges. Nevertheless, Standard Chartered has been proactive, collaborating with regulators to cater to institutional clients’ growing demand for Bitcoin and Ethereum trading. The bank’s expansion into the digital asset space includes investments in crypto-related firms like Zodia Custody and Zodia Markets and the establishment of Libeara, a blockchain-focused division aimed at facilitating the tokenization of traditional assets.
As the cryptocurrency market evolves, the implementation of spot trading desks by established banks like Standard Chartered underscores the growing institutional interest in digital assets. Despite a recent downturn in Bitcoin’s value, with a significant drop of over 20% since early 2024, the successful launch of Bitcoin exchange-traded funds in the US earlier this year has revitalized market liquidity.
This development has bolstered confidence among major institutions, driving them to deepen their involvement in the digital asset arena. Standard Chartered’s move into spot cryptocurrency trading not only reflects its commitment to diversifying its service offerings but also aligns with broader market trends where traditional financial entities are increasingly embedding themselves in the digital economy.