Dubai government-owned bank, Emirates NBD, has made a strategic investment in digital asset custody firm Zodia Custody. Standard Chartered founded Zodia Custody with Northern Trust as a minority investor. They were subsequently joined as shareholders by Japan’s SBI and National Australia Bank (NAB). Dubai and the UAE are embracing cryptocurrencies, with 30% of the population owning them, a figure that’s expected to grow 8% next year.
The investment was made via the Emirates NBD’s Innovation Fund.
“The investment in Zodia Custody’s robust and unique offerings positions Emirates NBD at the forefront of digital asset innovation, a trillion-dollar-asset class,” said Neeraj Makin, Group Head of Strategy, Analytics & Venture Capital, Emirates NBD.
“The MENAT region is transforming rapidly into a key player in the crypto economy fuelled by institutional and enterprise activity and a growing appetite for DeFi and Stablecoins. In line with our vision to be a digital leader in the region, we are making strategic investments via the Innovation Fund and committed to fostering a culture of innovation.”
This year Zodia Custody has landed a number of high profile clients for digital asset custody, most recently Securitize, the issuer of BlackRock’s tokenized money market fund, BUIDL. Other new clients include Deutsche Bank’s DWS and crypto institutions such as Galaxy Digital, asset manager 21shares and bitcoin miner Marathon Digital.
How a bank venture attracts other banks
It’s meant to be hard for banks to start companies and attract other banks to join, but Standard Chartered has managed to pull it off. That may be in part because Zodia Custody sits under venture arm SC Ventures which tries to operate independently from the main bank. In fact, Zodia appears to compete with the custody services recently launched by the parent bank, including in the UAE.
Meanwhile, Emirates NBD recently started engaging with a different type of DLT venture. It is exploring tokenized correspondent banking with Partior, the cross border payments platform co-founded by DBS Bank, JP Morgan, Standard Chartered and Temasek.
