Standard Chartered Is Launching Spot Crypto Trading Desk for Bitcoin and Ethereum

Standard Chartered, the British multinational banking and financial services company, is set to make a significant move in the cryptocurrency market by launching a spot trading desk for Bitcoin and Ethereum. This development, reported by Bloomberg on June 21, 2024, positions Standard Chartered as one of the first global banks to enter the spot cryptocurrency trading arena.

The new trading desk, to be based in London, will operate as part of the bank’s foreign exchange (FX) trading unit. This strategic placement within the FX division underscores the bank’s view of cryptocurrencies as an emerging asset class within the broader financial ecosystem. The desk is expected to commence operations in the near future, though an exact launch date has not been disclosed.

Standard Chartered’s decision to establish a spot crypto trading desk comes at a time of increasing institutional interest in cryptocurrencies. The bank has been working closely with regulators to support the demand from its institutional clients to trade Bitcoin and Ethereum. This move aligns with the bank’s broader strategy to support clients across the digital asset ecosystem, encompassing access, custody, tokenization, and interoperability.

The timing of this initiative may be linked to recent regulatory developments, particularly the Basel Committee’s rules for cryptocurrencies. These rules impose a 1250% risk weighting on crypto assets, which can make it challenging for banks to profitably engage in crypto trading. However, for prominent cryptocurrencies like Bitcoin and Ethereum, some hedging is allowed, potentially making the venture more feasible for Standard Chartered.

Moreover, the recent listing of crypto ETNs on the London Stock Exchange may have fulfilled one of the Basel hedging criteria, potentially facilitating Standard Chartered’s entry into spot crypto trading. The bank’s move also follows the approval of spot Bitcoin and Ethereum ETFs in the United States, signaling growing mainstream acceptance of these digital assets.

Standard Chartered is not new to the cryptocurrency space. The bank has already made strategic investments in the sector, including backing institutional crypto custodian Zodia Custody and digital asset trading firm Zodia Markets. In November 2023, the bank launched Libeara, a blockchain unit aimed at assisting institutions with the tokenization of real-world assets.

The bank’s analysts have been bullish on cryptocurrencies, predicting that Bitcoin could reach $100,000 within the year, with potential for further growth to $150,000 under certain political scenarios. They also accurately forecasted the U.S. Securities and Exchange Commission’s approval of spot Ethereum ETFs.