Standard Chartered Launches Crypto Custody Services in UAE Amid Rising Global Adoption

In a significant move signaling further institutional involvement in the digital asset space, Standard Chartered announced it will offer cryptocurrency custody services in the United Arab Emirates (UAE). The multinational bank will start by providing custody for Bitcoin (BTC) and Ether (ETH), the two largest cryptocurrencies by market capitalization.

The announcement was made on September 10, as the bank confirmed that its digital asset custody service is launching in partnership with Brevan Howard Digital, the crypto division of hedge fund Brevan Howard. This development follows the initial announcement in May 2023 when Standard Chartered signed a memorandum of understanding with the Dubai International Financial Centre (DIFC), a special economic zone designed to bolster Dubai’s financial services sector.

Standard Chartered has now secured a license from the Dubai Financial Services Authority (DFSA), the DIFC’s financial regulator, to operate the custody service. While the service will begin with BTC and ETH, the bank has plans to expand its offering to a broader range of crypto assets. According to the bank’s Group Chief Executive, Bill Winters, the launch represents a critical step in the evolution of the bank’s custody business. “We firmly believe that digital assets are not merely a passing trend, but a fundamental shift in the fabric of finance,” Winters said in a statement.

UAE Leading the Crypto Adoption Charge

The UAE has quickly emerged as a global leader in cryptocurrency adoption, ranking third behind Singapore and Hong Kong in Henley & Partners’ 2024 Crypto Adoption Index. The nation scored 41.8 in the study, excelling in categories like innovation, technology, and economic factors. Approximately 30.4% of the UAE’s population—roughly 3 million people—now own some form of cryptocurrency, further cementing the nation’s status as a major player in the fintech space.

Standard Chartered’s venture into the UAE’s digital asset market comes on the heels of a series of crypto-related partnerships. On July 18, the bank teamed up with Web3 firm Animoca Brands to participate in a stablecoin sandbox initiative led by the Hong Kong Monetary Authority. More recently, on August 29, it partnered with Crypto.com to offer fiat services to over 90 countries, starting with the UAE. The partnership allows users to deposit and withdraw U.S. dollars, UAE dirhams, and euros within the trading platform, further integrating traditional banking services with the crypto ecosystem.

Global Crypto Adoption Surges, Vietnam and Emerging Markets Rise

The rapid pace of crypto adoption is not confined to the UAE. Across the globe, nations like Vietnam are also witnessing a significant uptick in crypto engagement. Recent data reveals that 21.2% of Vietnam’s population—equivalent to 21 million people—are involved in cryptocurrency, surpassing Singapore’s 11.1% adoption rate. This trend highlights the growing interest in digital assets as vehicles for wealth diversification, particularly in emerging markets where traditional financial systems may be less accessible.

While developed markets like the U.S. see steady growth in crypto adoption—15.6% of Americans now own digital currencies, bolstered by regulatory advances such as Bitcoin and Ethereum ETFs—emerging markets are proving to be fertile ground for digital asset expansion. Countries like Iran, the Philippines, Brazil, and Saudi Arabia also boast substantial crypto adoption rates, ranging from 13% to 15%, signaling a broader global shift toward decentralized finance and alternative investment avenues.

Regulatory Landscape Evolves

As cryptocurrency adoption accelerates, regulatory frameworks are also being updated to mitigate risks associated with digital assets. For example, Singapore’s Monetary Authority (MAS) recently amended the Payment Services Act to enhance its oversight of digital payment token services, including the custodial services of cryptocurrencies. These measures are designed to enforce anti-money laundering standards, counter the financing of terrorism, and protect users while ensuring financial stability.

The global regulatory landscape is rapidly evolving, reflecting the need for stricter oversight as more individuals and institutions embrace digital currencies. Standard Chartered’s move into the UAE’s crypto space illustrates both the growing acceptance of digital assets within traditional finance and the increasing importance of robust custodial solutions for safeguarding digital wealth.

As Standard Chartered enters the UAE’s burgeoning crypto market, the world is watching closely. With over 30% of the UAE population already holding digital assets, the bank’s new custody service is set to play a crucial role in the next phase of crypto adoption. As the industry continues to grow globally, particularly in emerging markets, the intersection of traditional finance and decentralized assets will remain a key focal point for investors and regulators alike.

Robert Samms
Digital Assets Desk