In a significant move for the digital asset landscape, Standard Chartered is reportedly positioning itself to launch a crypto prime brokerage through its venture arm, SC Ventures. This innovative approach could offer a strategic edge against the stringent capital requirements imposed by Basel III regulations, which have presented challenges for banks operating in the cryptocurrency sector.
The London-based bank is exploring a model that aims to provide essential services such as financing, custody, and trading to institutional clients while strategically avoiding the punitive capital treatment associated with direct crypto investments. Currently, under Basel III rules, banks face a staggering 1,250% risk weighting for “permissionless” cryptocurrencies like Bitcoin and Ether, a stark contrast to the 400% risk weighting applicable to some venture capital holdings. By situating crypto activities outside its main corporate and investment banking operations, Standard Chartered could benefit from a more favorable capital framework, allowing it to engage with digital assets while remaining compliant with regulatory standards.
This initiative aligns with the bank’s broader strategic vision in the crypto space, building upon its existing commitments to institutional platforms, including Zodia Custody and Zodia Markets. Last year, Standard Chartered made history as the first globally systemic important bank to offer spot trading for cryptocurrencies to institutional investors.
In conjunction with this prime brokerage endeavor, SC Ventures is also involved in Project37C, a digital asset joint venture that combines aspects like custody, tokenization, and market access—a testament to the evolution of services aimed at institutional clients in the digital finance realm.
Geoff Kendrick, the Head of Digital Assets Research at Standard Chartered, recently shared insights suggesting that Ethereum is poised to outperform Bitcoin. He pointed to various positive indicators for Ethereum, including the robust activities of major Ethereum-focused treasury companies, its dominance in the realms of stablecoins and DeFi, and advancements aimed at significantly enhancing layer-1 transaction capabilities.
While there has been a reduction in Ethereum price forecasts for 2026-2028 due to overall market downturns, Kendrick remains optimistic about the long-term trajectory. Projecting Ethereum could reach $40,000 by the end of 2030, he emphasized a strategic outlook that favors Ethereum’s relative fundamentals over Bitcoin in the current market climate.
As global regulators contemplate adjustments to crypto capital regulations, banks are already experimenting with frameworks to facilitate their entry into the market. Standard Chartered’s approach could potentially set a precedent for how major financial institutions engage with digital assets, reshaping institutional adoption through innovative structures without waiting for regulatory changes to take effect.
In related news, the performance of cryptocurrency equities is drawing attention, with pre-market trends showing mixed results for companies such as MicroStrategy, Coinbase, and Galaxy Digital Holdings as investors keep a close watch on developments in the crypto sector.
