Zodia Custody, the crypto-focused subsidiary of the renowned British multinational bank Standard Chartered, is set to offer a groundbreaking staking service, allowing its clients to earn substantial yields on their crypto assets. This move is part of Zodia’s ongoing effort to provide innovative solutions to the growing demand for secure and high-yield crypto investment options.
In collaboration with OpenEden, Zodia Custody introduces the “Zodia Custody Yield” service, a platform that leverages blockchain technology to tokenize real-world assets such as treasury bills. By doing so, it opens up an avenue for investors to earn attractive yields while benefiting from the inherent advantages of blockchain technology.
One of the key features of the yield offering is staking, a practice where crypto owners lock up their digital assets to support the blockchain network’s security. In return, they receive periodic crypto rewards. This method provides a compelling earning opportunity, especially for institutional investors.
However, it’s important to note that staking has recently attracted regulatory scrutiny in the United States. Companies like Kraken and Coinbase have faced legal action from the Securities and Exchange Commission (SEC) for offering similar products to retail customers without adequate risk disclosures.
In contrast, European firms are embracing staking services with enthusiasm. Just this month, Germany’s exchange giant, Boerse Stuttgart Group, unveiled a staking service tailored for institutional clients, citing increasing interest from this sector in staking opportunities.
Zodia Custody’s service addresses the growing demand among institutions for “low-risk, liquid, and transparent” digital asset products. It aims to provide secure ways for stablecoin holders to generate returns on their assets.
Stablecoins, which are blockchain-based tokens backed by fiat currencies like the US dollar, have gained immense popularity as a means of value transfer and loan collateral within the blockchain and DeFi ecosystems. There are currently billions of dollars worth of stablecoins in circulation, and Zodia Custody seeks to tap into this vast market to create investment opportunities for its clients.
Jeremy Ng, co-founder of OpenEden, expressed the significance of this opportunity, stating, “There are billions of dollars worth of stablecoins sitting on the sidelines when they could easily be generating yields for investors. That’s a huge opportunity, and one that we and Zodia Custody hope to bring to institutions.”
Julian Sawyer, CEO of Zodia Custody, emphasized the potential for digital assets to reshape traditional finance, saying, “There is a lot in the world of traditional finance that can be moved to digital assets.”
Notably, this announcement comes shortly after Zodia Custody expanded its crypto custody services to Singapore, reaffirming its commitment to providing innovative and secure solutions to institutional clients in the rapidly evolving world of cryptocurrency.
As the crypto industry continues to mature and adapt to changing regulatory landscapes, Zodia Custody’s new staking service offers a glimpse into how traditional financial products can find a new home in the digital asset space while catering to the needs of institutional investors seeking secure and lucrative opportunities.
