"Standard Chartered readies crypto prime brokerage… steps up push into the institutional market"
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Summary
- Standard Chartered is reportedly considering launching a digital-asset (cryptocurrency) prime brokerage business.
- The plan would likely sit under SC Ventures, and could be linked to the bank’s spot cryptocurrency trading services for institutional clients.
- The market views the structure as a way to reduce the burden of the Basel III 1250% risk weight, and as a move that could accelerate competition in crypto prime brokerage among global banks.
UK-based global bank Standard Chartered is reportedly considering launching a digital-asset (cryptocurrency) prime brokerage business.
According to Bloomberg on the 12th, Standard Chartered is discussing setting up a prime brokerage unit for cryptocurrency trading. The proposal most widely cited would place the business under SC Ventures, the bank’s wholly owned venture arm. The talks are at an early stage, and the service launch timeline has yet to be finalized.
Standard Chartered has been relatively proactive among global banks in the digital-asset space. It has invested in crypto custodian Zodia Custody and institutional trading platform Zodia Markets, and in July last year said it would provide spot cryptocurrency trading services to institutional clients—the first among global systemically important banks.
SC Ventures did not issue a separate comment on the matter. However, in December last year SC Ventures said it was developing 'Project 37C,' a digital-asset joint initiative, describing it as a lightweight financial and market platform offering custody, tokenization and market access functions. The announcement did not specify whether it would include prime brokerage services or name external partners.
Some in the market interpret the proposed structure as a strategy to ease the burden of capital regulation. Under current Basel III rules, banks are assigned a 1250% risk weight for permissionless cryptocurrencies such as Bitcoin and Ether. This is far higher than the 400% applied to some venture-capital investments. If the prime brokerage business is pursued under a venture arm, there may be scope for Standard Chartered’s corporate and investment banking division to avoid bearing the regulation directly.
The outlet reported that "global regulators are also in talks to review rules governing banks’ crypto holdings" and that "some in the market see Standard Chartered’s move as potentially accelerating competition among global banks in crypto prime brokerage."
