cryptocurrency services

Standard Chartered’s Zodia Custody Gets FCA Approval to Offer Cryptocurrency Services

Zodia Custody has announced that it has obtained approval from the UK regulator (Financial Conduct Authority – FCA).

SC Ventures, the innovation and ventures unit of Standard Chartered and Northern Trust Corporation, launched Zodia Custody in 2020 in response to the rising number of institutions making their entry into the digital asset market.

Based on the development regarding the FCA’s approval, Alex Manson of SC Venters stated: “We believe crypto assets as an asset class is here to stay. We set up Zodia Custody with the clear goal of serving institutional investors who want to invest in cryptoassets in a sustainable, safe and responsible way. Our aspiration is to lift standards, grow the ecosystem and help a nascent industry mature, becoming more acceptable to institutional investors and ultimately society at large.”

Zodia Custody has obtained approval from the FCA under UK money laundering regulations. It will now apply standards equivalent to those already used for the custody of traditional securities in running its cryptocurrency business.

With its aim to serve the institutional market, Zodia Custody will offer custody services for the most-traded cryptocurrencies, including Bitcoin, Ethereum, followed by XRP, Litecoin, and Bitcoin Cash, which represent 80% of the total assets traded on the largest crypto exchanges at approximately $395 billion. Zodia is therefore well set to offer services to cryptocurrency businesses.

Crackdown on Cryptocurrency

Zodia’s entry into the digital asset market is likely to be a game-changer for the institutional adoption of crypto assets.

However, it has not been easy to get an FCA registration. So far, only nine firms have obtained a cryptocurrency registration. The main requirement is the enforcement of anti-money laundering and the prevention of terrorism financing. In January 2020, the FCA enabled a temporary registration, with about 75 firms currently holding such a designation, including the likes of Revolut, which processes significant volumes.

The first authorisation by FCA went to Archax, the tokenised securities firm, in August 2020. The only registration approval awarded to crypto businesses in 2020 included Ziglu crypto investment firm and crypto trading firm Gemini Europe. Since September 2020, there was no registration approval until this year in June when custody firm DigiVault, Ramp Swaps, Fibermode, and Solidi got approval.

In June this year, over 60 crypto-related firms, including Binance, withdrew their applications with the Financial Conduct Authority to do business in the UK. The nation tightened its regulation in space.

In late June, the regulator banned Binance from conducting its regulated activities in the country due to a lack of proper money laundering and terrorism financing prevention capabilities. The FCA joined other regulators across the globe, moving to prohibit or heavily control the crypto exchange amid a series of global regulations aiming to tighten regulations around crypto use. The ban also reflects concerns that Binance exchange is being used by criminals to launder the proceeds of attacks.

Visa Integrating Cryptocurrency Services into Brazilian Banks

Visa Inc, the world’s largest retail electronic payments network, has begun working on integrating cryptocurrency services into traditional banking systems in Brazil.

Eduardo Abreu, Visa’s Vice President of New Business in Brazil, had a recent interview with a local media outlet, Seu Dinheiro. The executive disclosed that Visa corporation is working on integrating cryptocurrencies into its platform for both payments and a store of value.

Abreu talked about the development and said that Visa is working with several fintech firms in Brazil to bring cryptocurrency payments cards to the local market. The executive disclosed that the corporation is developing applications (APIs) to connect traditional banks with cryptographic products.

The VP of VISA further said that the company is working with several Brazilian companies, including Zro Bank, Alterbank, and Rippio, to create cryptocurrency cards and allow users to link their accounts to such crypto services via their bank accounts.

Abreu also revealed that Visa is developing a business-to-business blockchain that will allow local fintech firms to settle payments using smart contracts. And such a blockchain system would enable financial providers to verify deposits and payments and therefore enhance transparency.

The executive mentioned that the blockchain system is already in testing phases with some of their clients and said that Visa would make further announcements soon regarding the project.

Abreu stated that Visa would start testing direct crypto payments in Brazil shortly to explore how the blockchain system enables the transfer of Bitcoin and other major cryptocurrency transactions into other accounts such as bank accounts.

Unlike conventional cryptocurrency cards, which requires a mediator to convert Bitcoin for fiat money, this system would eliminate the need for an intermediary.

Although the Visa executive has not given a specific timeline for the launch, it is expected within the next few coming months. Visa aims to bridge a gap between cryptocurrencies and the existing banking system in a country with rising crypto adoption.

In the interview, Abreu stated that greater adoption would require integrating traditional banking activities within the cryptocurrency ecosystem so that customers can transact with crypto and fiat in the same environment.

“The great advantage of adopting Bitcoin is, without a doubt, its ease. Without needing to exchange a fiat currency, there is an optimisation of exchanges when using Bitcoin,” said Abreu.

Visa Cryptocurrency Solutions

Visa, which already provides180 currencies on its platform and aims to leverage its 170 million customers across the world, wants to be a leader in the booming crypto industry.

In March, the payment giant announced plans to work with Bitcoin wallets to enable the conversion of BTC to fiat currencies, marking a milestone for the 62-year-old company.

Visa is currently working with several crypto firms such as Anchorage, Crypto.com, and others, issuing Visa-powered cards for cryptocurrency payments and transactions.

Visa wants to eliminate the hassle of requiring customers to convert their crypto holdings into fiat currency before settling their accounts on the Visa network. The firm plans to expand the feature to other members of its payment networks and other digital currencies later this year.

SEBA Bank Secures SFC License, Expanding Crypto Services to Hong Kong

Switzerland-based cryptocurrency bank SEBA Bank has marked a significant milestone by obtaining a license from the Hong Kong Securities and Futures Commission (SFC). The license, granted on November 3rd, represents a crucial step for SEBA in expanding its cryptocurrency services in the Asia Pacific region. SEBA Hong Kong, a subsidiary of SEBA Bank, is now authorized to offer a range of cryptocurrency-related services within the area, as confirmed by the SFC’s official website.

SEBA Bank established its first Hong Kong office in November 2022, underlining its strategy to broaden its service spectrum in Asia. Following an initial permission in principle from the SFC in August 2023 for virtual asset trading services, the recent licensing confirms SEBA’s operational expansion outside its home country, including a presence in Abu Dhabi.

With this new license, SEBA can engage in the trading and distribution of all securities, encompassing digital asset-related products like over-the-counter (OTC) derivatives. Moreover, the license allows SEBA to provide advisory services on securities and digital assets and manage assets for discretionary accounts, which include both traditional and digital assets.

SEBA’s services, facilitated by this license, will cater to institutional and professional investors such as corporate treasuries, funds, family offices, and high-net-worth individuals. Franz Bergmueller, the Chief Executive Officer of SEBA, expressed enthusiasm in an official statement, highlighting Hong Kong’s pivotal role in the cryptocurrency economy since Bitcoin’s inception and the bank’s eagerness to contribute to Hong Kong’s digital asset market.

Hong Kong’s rigorous licensing system permits only a select few platforms to cater to both local and foreign clients, including retail customers. Upon the government’s announcement to license crypto-related businesses, approximately one hundred firms showed interest in establishing Hong Kong branches. However, only a handful have successfully navigated the regulatory landscape to obtain clearance.