Markets
StanChart plans cryptocurrency trading desk for Bitcoin and Ether
(Bloomberg) — Standard Chartered Plc is setting up a trading desk for Bitcoin and Ether, people familiar with the matter said, making it one of the first global banks to move into cryptocurrency spot trading .
Most read on Bloomberg
The new crypto desk is about to start operations and will be part of the bank’s foreign exchange trading unit, two of the people said, asking not to be named discussing private information. It will be managed from London, according to one person.
Banks including Goldman Sachs Group Inc. have been trading cryptocurrency derivatives for years, but strict regulations prevent them from directly trading the underlying assets. The Basel Committee on Banking Supervision has proposed that banks must apply a 1,250% risk weight to any unhedged crypto exposure, making it difficult to generate profits.
“We are working closely with our regulators to meet our institutional clients’ demand to trade Bitcoin and Ethereum, in line with our strategy to support clients across the digital asset ecosystem, access and from custody to tokenization and interoperability,” the bank said. in an emailed statement.
A Standard Chartered spokesperson declined to comment further.
Standard Chartered is among several major banks diving deeper into crypto as institutional adoption of the asset class broadens. It has stakes in two crypto companies, Zodia Custody and Zodia Markets, which offer services ranging from custody to over-the-counter trading.
In November, it launched a blockchain unit called Libeara to help institutions tokenize traditional assets. The unit supports the creation of a tokenized government bond fund using the Singapore dollar.
The latest move comes as Bitcoin’s volatility has been subdued, down more than 20% since the start of 2024, reflecting changes in stock markets and reduced trading desk profits. Bitcoin fell to its lowest level since May 15 in London on Friday morning and is down about 14% from its March record.
Despite this, the highly successful launch of US Bitcoin exchange-traded funds in January increased liquidity in cryptocurrency markets and gave large institutions more confidence to move into digital assets.
(Updates to add chart, context on Bitcoin activity in last paragraph.)
The story continues
Most read from Bloomberg Businessweek
©2024 Bloomberg LP