In a recent interview, Standard Chartered’s SC Ventures head Alex Manson told Ledger Insights that the company’s structure allows its subsidiaries to be disruptive. It intentionally separates incubated startups from business lines motivated to protect their profit centers. Today one of SC Ventures’ subsidiaries, Zodia Markets, launched a stablecoin solution targeting corporate cross border payments.
Zodia Markets is collaborating with Fireblocks to “address correspondent banking challenges”.
To put that in context, Standard Chartered is a global systemically important bank (G-SIB) with international activities making up a massive part of its business. Among the 40 G-SIBs, only ING has a higher cross border activity rating than StanChart relative to its size. In other words, correspondent banking is an important profit center for the bank.
“Cross-border payments between many jurisdictions suffer from slow transaction speeds, limited availability during business hours, high costs and a lack of transparency,” said Nick Philpott Co-founder of Zodia Markets. “Stablecoins enable value transfer using the internet, granting corporate entities a competitive edge the internet provides to other industries today.”
He added, “Ultimately, this collaboration places control of cross-border payments squarely in the hands of corporate treasurers and CFOs.”
Zodia Markets is a crypto trading venue that also supports trading multiple currency stablecoins, bringing FX on chain. Fireblocks started as a custody technology firm but now runs a massive network, one of the most connected in the digital asset space. Zodia cited Fireblocks’ dynamic payment workflow as one of the appeals of the collaboration.
“The expansion to non-USD on/off ramps is also on the rise which makes this collaboration with Zodia Markets not just unique in its value proposition, but also marks the beginning of bringing FX on-chain,” said Richard Astle, VP Business Lead Fireblocks Network.
DLT to make correspondent banking more efficient
At the same time as embracing stablecoins, Standard Chartered is also a backer of a more conservative project, Partior. This aims to bring together some of the world’s biggest correspondent banks, including JP Morgan and DBS Bank, to use DLT to make correspondent banking more efficient. It also addresses the issues of slowness and business hour restrictions.
From the point of view of Standard Chartered’s shareholders, if Zodia grabs a chunk of corporate payments and profits from them rather than some other company, that’s still a win.
As SC Ventures told Ledger Insights, it’s important to accelerate disruptions, “If it cannibalizes an existing business, so be it,” said Mr Manson. “Because if we don’t do it, someone else will.”
