Today Zodia Custody announced the launch of its new digital asset lending and borrowing solution, Collateral Protect, through an integration with Tokenet. Zodia is backed by Standard Chartered’s SC Ventures, SBI and Northern Trust. Digital Prime Technologies launched Tokenet last November. Founded by an ex-Cantor Fitzgerald team, Tokenet provides an institutional lending and borrowing matchmaking platform. Clients at the launch included Citadel and Schwab-backed EDX Clearing, Xapo, and Hidden Road.
With the demise of the major crypto lenders Genesis, Celsius, and BlockFi, there’s a gap in the market for digital asset lending.
However, unlike these centralized lenders, Tokenet enables bilateral arrangements. Through the integration, Zodia’s Collateral Protect holds the collateral in segregated cold storage wallets. Nonetheless, the solution supports real time transactions. Additionally, Zodia Custody has a bankrupt remote structure, so the assets won’t form part of its bankruptcy estate in the unlikely event of its collapse.
“This integration throws the doors wide open for institutions to enter the digital borrowing and lending market,” said James Harris, Chief Commercial Officer of Zodia Custody. “And for the first time, they can do so within the same rigorous security and compliance measures they’re used to from the traditional finance space.
Standard Chartered’s SC Ventures founded Zodia Custody in late 2020, with Northern Trust as a minority shareholder. It has licenses in the UK, Ireland and Luxembourg. It launched services in Australia last year and plans to expand to Dubai.
During 2023 SBI led a $36 million funding round. Standard Chartered retains a roughly 72% stake, SBI 20% and Northern Trust 8%. As part of the deal SBI has a 51% share of Zodia Custody Japan.
