Zodia Custody, a digital asset custody service provider backed by Standard Chartered, has announced that it will offer yield on crypto holdings to its clients. This means that customers who store their cryptocurrencies with Zodia will be able to earn interest on their assets, similar to how traditional banks offer savings accounts or certificates of deposit.
Crypto custody is the service of securely storing and managing the private keys of cryptocurrency assets. Crypto custody providers offer various solutions for institutional and individual investors who want to hold large amounts of crypto assets without worrying about security risks or operational complexities.
Zodia Custody was launched in December 2020 as a joint venture between Standard Chartered and Northern Trust, two of the world’s leading financial institutions. Zodia aims to provide institutional-grade custody solutions for cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, Bitcoin Cash and XRP. Zodia is also one of the first crypto custodians to be registered with the UK’s Financial Conduct Authority (FCA) under the Money Laundering Regulations.
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According to Zodia’s website, the yield offering will be powered by Fireblocks, a platform that enables secure transfer and storage of digital assets. Fireblocks uses a network of over 400 liquidity providers and lending platforms to source the best rates for crypto yield. Zodia claims that its yield offering will be fully compliant with the FCA’s rules and regulations, and that it will provide transparency and security for its clients.
Some of the benefits of crypto custody are:
Enhanced security: Crypto custody providers use advanced encryption, multi-signature protocols, cold storage, and other measures to protect the private keys from hackers, theft, or loss. They also comply with regulatory standards and undergo regular audits to ensure the safety and transparency of their operations.
Simplified management: Crypto custody providers handle the technical aspects of managing crypto assets, such as generating and storing private keys, updating software, performing backups, and executing transactions. They also provide easy-to-use interfaces and tools for users to access and monitor their crypto holdings.
Reduced liability: Crypto custody providers assume the responsibility and liability for the security and management of the crypto assets. This reduces the burden and risk for the users, who can focus on their core business or investment strategies.
Increased liquidity: Crypto custody providers enable users to access and trade their crypto assets on various platforms and markets, without compromising security or convenience. They also facilitate the integration of crypto assets with other financial services, such as lending, borrowing, staking, or earning interest.
Regulatory compliance: Crypto custody providers help users comply with the legal and regulatory requirements of different jurisdictions, such as anti-money laundering (AML), know-your-customer (KYC), tax reporting, and licensing. They also provide users with the necessary documentation and evidence to prove their ownership and control of their crypto assets.
Zodia’s CEO, Maxime de Guillebon, said in a press release: “We are delighted to launch our yield offering, which will allow our clients to access attractive returns on their crypto holdings while benefiting from Zodia’s high standards of security and compliance. This is a significant milestone for Zodia as we continue to expand our product suite and deliver innovative solutions for the institutional crypto market.”
Zodia’s yield offering is expected to launch in the fourth quarter of 2023 and will be available for select clients initially. Zodia said that it plans to add more cryptocurrencies and yield products in the future, as well as other services such as staking, lending and borrowing.