Standard Chartered Bank joined the bandwagon of traditional financial institutions, entering the decentralized finance (DeFi) space as it plans to launch its crypto brokerage platform. With this initiative, the bank is trying to bypass the 1250% capital requirement regulation imposed for unauthorized assets.
As traditional finance adopts crypto into its daily activities, Standard Chartered Bank stated that it is planning to launch its own crypto brokerage platform. Although the bank has not announced a timeframe for the rollout of this initiative, the venture capital arm of the bank, SC Ventures, will be the entity that will establish the brokerage.
Once the plan kicks off and the brokerage starts functioning, it will offer services that will include custody, financing, and market access.
This isn’t banks suddenly turning bullish on crypto. It’s institutional market plumbing catching up under tight bank regulation. Retail demand creates exchanges, but institutional demand creates prime brokers, because funds need credit, margining, and coordinated access across venues.
Analyst Lavneet Bansal
“We saw this last year when Ripple acquired Hidden Road, and when Morgan Stanley chose to offer crypto trading via Zero Hash instead of putting crypto directly on its balance sheet. For banks, direct crypto exposure carries heavy capital and regulatory costs, so services are being built through venture arms and partnerships.” Bansal said.
Additionally, Bansal said that Standard Chartered already operates custody and execution through Zodia, and a prime brokerage layer is the logical next step to serve institutional clients while staying within regulatory constraints.
From an investor’s perspective, banks entering the crypto space is a confidence booster. It shows a maturing market and institutional credibility with a sturdy infrastructure and robust regulatory framework. When banks, which saw crypto as a threat to their industry, adopt crypto, it goes on to show that the tectonic shift from traditional finance to decentralized finance is really happening.
