Standard Chartered Enters Spot Crypto Trading Space

In a significant crypto development, Standard Chartered announced on June 21 that it is close to starting a trading desk for Bitcoin and Ethereum. According to a Bloomberg report, the new crypto-focused operations will be part of the London bank's FX trading unit.

"We have been working closely with our regulators to support demand from our institutional clients to trade Bitcoin and Ethereum, in line with our strategy to support clients across the wider digital asset ecosystem, from access and custody to tokenization and interoperability," said Standard Chartered.

Traders reacted immediately to the news, bringing upside momentum to Bitcoin and Ethereum prices. BTC price rebounded 1% after the news but is still down 2% in the past 24 hours, with the price currently trading at $64,151.

Meanwhile, the ETH price also reversed upside after dropping to a low of $3,446. It is currently trading at $3,514, down 2% in the last 24 hours.

Institutional Push and Regulatory Compliance

Standard Chartered has worked closely with regulators to offer products and services catering to growing institutional client demand.

This aligns with the bank's overall strategy to support clients across the broader digital asset ecosystem. Crypto industry leaders, including Binance CEO Richard Ten, have welcomed the move, which indicates that mainstream adoption of crypto is picking up pace.

Backing Zodia Custody and Markets

The bank part-owns institutional crypto custodian Zodia Custody and has backed institutional digital asset trading firm Zodia Markets.

Setting up its own spot crypto trading desk shows a clear intention to move deeper into digital assets after dipping its toes through investment. Zodia Custody has also announced expanding the list of supported digital assets for comprehensive custody solutions, adding USDe to its custody platform.

Mastercard Collaboration and Tokenized Deposits

Recently, Mastercard and Standard Chartered Bank Hong Kong (SCBHK) completed their first live experiment on executing tokenized deposits using the Mastercard Multi-Token Network (MTN). This collaboration highlights Standard Chartered's commitment to innovation in the digital asset space.

Crypto Market Impact

The news of Standard Chartered's entry into spot crypto trading has immediately impacted the market.

Trading volumes for Bitcoin and Ethereum have increased significantly, with BTC's trading volume up by 37% and ETH's by 15% in the last 24 hours. This has raised speculation of a recovery in the crypto market.

"We have been working closely with our regulators to support demand from our institutional clients to trade Bitcoin and Ethereum, in line with our strategy to support clients across the wider digital asset ecosystem, from access and custody to tokenization and interoperability," said Standard Chartered.

A Milestone for Global Banks

Standard Chartered's foray into spot crypto trading marks a key milestone for global banks. Over the past few years, due to a strict regulatory landscape, banks such as Goldman Sachs have traded crypto derivatives.

However, the central bank has dealt directly with trading underlying assets such as Bitcoin and Ethereum just now.

In a 2022 report, the Basel Committee recommended that banks apply a 1,250% risk weighting when trading crypto assets, making it difficult to turn a profit. Standard Chartered's move could pave the way for other banks to follow suit.