Julian Sawyer, CEO of Zodia Custody, described the company’s ongoing acquisition by Standard Chartered as an “important validation” that highlights a growing reality in mainstream finance: legacy banks cannot build institutional-grade digital asset custody securely or efficiently without the right software.
Rather than treating cryptocurrencies as an isolated sector, Sawyer noted that the industry is reaching a point of maturity where the underlying blockchain infrastructure is moving toward tokenization of real-world assets and stablecoin payments.
“This is the point of maturity where blockchain custody… is moving from cryptocurrencies to other assets, stablecoins and tokenization,” he said in an interview with CoinDesk on Wednesday. “If you’re going to do that, you need trust. Trust is what banks do.” Because these financial use cases require absolute trust, global banks are taking steps to acquire established platforms to gain immediate scale and secure bank-grade technology.
Sawyer noted that customer interest in its infrastructure software has increased dramatically. “All banks will need to know how to hold digital assets,” Sawyer said.
“The big guys are absolutely watching, and everyone else who is thinking about stablecoins… thinking about tokenization needs to have an answer. So the market is huge.”
Standard Authorized Acquisition
Sawyer confirmed that Standard Chartered’s full acquisition of the company is on track to close by the end of June and be completed by the end of August.
He declined to disclose the purchase amount or valuation. In 2023, Zodia announced a $36 million funding round led by SBI Holdings. Market estimates put the custodian’s annual revenue at approximately $34.6 million. Market estimates put the custodian’s annual revenue at approximately $34.6 million with current total funding of approximately $46 million.
It said that under the acquisition deal, Standard Chartered’s existing digital custody business in Dubai, Luxembourg and Hong Kong will be merged with Zodia Custody and will ultimately be merged with Standard Chartered under its brand, meaning Zodia Custody will not exist in the medium term.
At the same time, a new entity called Zodia Solutions will run the software and infrastructure part of the business, backed by existing banking shareholders including Northern Trust, Emirates NBD and National Australia Bank.
“This is an important validation,” Sawyer said, detailing the systemic impact of the consolidation. “Every bank in the world is going to do something with digital assets…they will need to know and have some technology to be able to hold those assets.”
Global regulation
Institutional integration is forcing regulatory convergence around the world. When asked if the UK is holding back from becoming the crypto hub it aspires to be due to internal friction between the Bank of England, the Treasury and the Financial Conduct Authority (FCA), Sawyer acknowledged the changing tides.
“I suppose I’m old enough to remember when the FCA was ahead of the market and people came to the UK to settle,” Sawyer said. “I think one of the fascinating parts of our industry is that every jurisdiction, every government, moves at a different pace.”
He highlighted “huge progress” in Asia and Singapore, as well as new regulations in Hong Kong and Abu Dhabi. “The message I would give is that this is a very evolving ecosystem and regulators and participants need to continue to evolve.”
While some industry participants are concerned that Wall Street giants will completely take over the sector, Sawyer suggests that the crypto industry is naturally moving towards banking due to compliance with laws such as Know Your Customer (KYC) and Anti-Money Laundering (AML).
“The cryptocurrency industry is moving toward banking thanks to the law,” Sawyer said.
