Standard Chartered to Launch Spot Crypto Trading Desk for Bitcoin and Ether

Standard Chartered Plc is establishing a trading desk for Bitcoin and Ether, according to sources familiar with the matter, as reported by Bloomberg. This initiative marks one of the initial ventures by a global bank into spot cryptocurrency trading. The new desk is nearing operational readiness and will be integrated within the bank’s FX trading unit, based primarily in London as disclosed by sources preferring anonymity.

While several banks, like Goldman Sachs Group Inc., have long traded cryptocurrency derivatives, stringent regulations have historically deterred direct involvement with the underlying assets. Regulatory hurdles, such as the Basel Committee on Banking Supervision's proposal of a 1,250% risk weighting for unhedged crypto exposure, have posed profitability challenges.

“We have been working closely with our regulators to support demand from our institutional clients to trade Bitcoin and Ethereum, in line with our strategy to support clients across the wider digital asset ecosystem, from access and custody to tokenization and interoperability,” the bank stated in an email to Bloomberg.

Standard Chartered joins other major banks in deepening involvement in crypto amid expanding institutional adoption of these assets. The bank holds stakes in Zodia Custody and Zodia Markets, firms offering services ranging from custody to over-the-counter trading.

In November, it launched Libeara, a blockchain unit aiding institutions in tokenizing traditional assets, including the development of a tokenized government bond fund denominated in Singaporean dollars.

This move coincides with Bitcoin's recent stability, showing a decline of over 20% since the beginning of 2024, mirroring trends in equity markets and pressuring profits at trading desks. Bitcoin recently reached its lowest point since mid-May in London trading and is down approximately 14% from its March peak.

Nevertheless, the successful launch of US Bitcoin exchange-traded funds earlier this year has bolstered liquidity in cryptocurrency markets and bolstered confidence among large institutions to delve deeper into digital assets.