Standard Chartered Bank, the UK-based multinational bank has recently announced that they will officially launch a Spot Bitcoin and Ethereum trading desk.
The new desk of the bank will be headquartered in London and is set to start its operation as part of the bank’s FX trading unit.
The decision puts Standard Chartered Bank at the top of the list for banks that offer stop cryptocurrency trading services.
Let us look more closely at the details regarding this new move and examine the potential impacts that the decision is going to have on Standard Chartered Bank.
What was the Announcement from the Standard Chartered Bank regarding?
The Standard Chartered Bank on June 21, announced through an email about their Launch of a Spot Bitcoin and Ethereum trading Desk based in London.
The bank said that this decision was taken in direct response to the numerous requests the company had received from its customers requesting and same and accounting for the newfound interest that many of their clients have taken into cryptocurrency trading.
The Standard Chartered Bank commented on the same topic by saying that they had been working closely with many regulators to cater to the demand coming from many of their institutional clients for the option to trade through cryptocurrencies like Bitcoin and Ethereum.
The decision was to support their clients across the wider assets ecosystem by providing them with access to facilities such as tokenization and interoperability.
It was found that many other banks such as HSBC and BNY Mellon had already unveiled or suggested the launching of a crypto custody platform for an exclusive group of its institutional clients but none had done so on such a large scale as offered by us – said a representative for Standard Chartered Bank.
In the next section, Let us look at some of the other major companies involved in the field of cryptocurrency trading that Standard Chartered Bank might be competing against.
Who are the other major players in the field of Cryptocurrency trading?
Several Crypto-native firms like Kraken, Coinbase, and Ripple have already offered their customers custody over some of the world’s top cryptocurrencies.
If we look into other banking entities, institutions like Goldman Sachs have already offered some of their customers crypto derivatives trading options.
Most of these institutions exist mainly as a facilitator of cryptocurrency trading and most of the other banks such as Goldman Sachs and HSBC Ltd. have not shown much in terms of action from their side to take the leap forward with the case of cryptocurrency trading.
In the next section let us look at what are some of the reasons cited for the slow adoption of cryptocurrency trading by most mainstream financial entities.
What are the Reasons behind the slower adoption of cryptocurrency trading into mainstream financial markets?
The general lack of clarity on the regulatory aspects of the service and its digital assets is mostly cited by many bank representatives as a reason for the slow adoption of banks into a field such as spot crypto trading.
This along with the proposal from the Basel Committee on Banking Supervision requiring banks to levy a 1,250% risk on all the unhedged crypt exposure limited their long-term profit potential.
However, this was not the first instance recorded of Standard Chartered Bank’s venture into the world of crypto trading.
They had previously introduced Libeara, a blockchain platform that was made to facilitate firms with their tokenization projects that were linked to real-world assets.
As one of its initial ventures into the Web3 sector, The Libeara project was involved with tokenizing government bond funds which were used for the Singaporean dollar.
The bank is also said to maintain a significant stake in crypto trading companies like Zodia Custody and Zodia Markets.
Let us now look at what we can take away from all the things that we have discussed relating to the banks and their involvement with cryptocurrency trading.
Final Thoughts
The decision taken by Standard Chartered Bank has made it a pioneering institution in the field of cryptocurrency trading integration into the mainstream financial markets.
The move is bound to encourage other similar large-sized banks to follow through the same steps and set up their own subsidiaries to provide cryptocurrency trading services to their customers.
The Increased adaptation of banks to the cryptocurrency market can let more people into the market chain and potentially make cryptocurrencies like Bitcoin and Ethereum a widely accepted alternative form of payment on a much larger scale.
