Zodia Custody, the crypto arm of British multinational bank Standard Chartered, is looking to provide their clients with earning opportunities for their on-chain assets. The crypto custodian has teamed up with OpenEden to offer “Zodia Custody Yield” service, which allows institutional investors to earn returns on their cryptocurrency holdings.
The Zodia Custody says that its “Yield” service tokenizes real world assets, such as treasury bills, helping investors generate revenues through their crypto holdings—and use the blockchain technology to their advantage. The goal here is to allow institutional investors “access off-chain yield potential for their on-chain assets without compromising the bank-grade security of Zodia Custody’s platform,” the company said in a press release.
Staking is a service that allows crypto owners to lock up their assets to help support the blockchain. In turn for staking their crypto, holders earn periodic yields in the form of cryptocurrency. From crypto-focused businesses, staking is a lucrative earning avenue; for US-based crypto firms, however, it has proven to be a regulatory quagmire.
Some of the biggest names in the industry – including Kraken and Coinbase – have come under fire from the U.S. Securities and Exchange Commission (SEC) for offering similar products to retail investors without providing the necessary risk disclosures. However, European entities are embracing this trend. For instance, popular German exchange Boerse Stuttgart Group recently launched a similar staking service tailored for institutional clients. The move came in response to the growing interest from institutional investors in the staking domain.
Echoing these sentiments, Zodia Custody said that its yield service is in line with the strong demand among institutions for “low-risk, liquid and transparent” crypto products. It also takes into account “how returns are generated for stablecoin holders.” Stablecoins are blockchain-based tokens whose value is pegged to fiat currencies like the ‘dollar’ or other assets like gold. Over the years, they’ve gained traction as a medium for value transfer and as loan collateral within the blockchain and decentralized (DeFi) sector.
“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,” OpenEden co-founder Jeremy Ng said.
The announcement comes just days after Zodia Custody set up shop in Singapore. In April, the crypto custodian had raised $36 million from investors, including Japanese financial conglomerate SBI Holdings. Meanwhile, its owner Standard Chartered forayed into the world of metaverse earlier this year, becoming the first bank to buy virtual land at The Sandbox metaverse’s Mega City district.
