Northern Trust teamed up with SC Ventures, the innovation and ventures unit of Standard Chartered, to launch Zodia Custody, a cryptocurrency custodian for institutional investors.
The agreement, announced Wednesday, is subject to registration with the Financial Conduct Authority, the U.K. financial services watchdog, and regulatory filings and customary closing conditions. Zodia is expected to begin operations in London in 2021, according to a news release.
"The introduction of digital custody backed by the know-how and experience of global banks is a breakthrough in the evolution and support of institutional cryptocurrency markets," said Pete Cherecwich, president of corporate and institutional services at Northern Trust, in the news release. "Zodia's robust capabilities will make it possible for institutional asset owners, family offices and asset managers to invest in a range of cryptocurrencies as interest continues to grow in these emerging and innovative financial instruments."
Pending regulatory approval, Zodia will provide custody services for the most-traded cryptocurrency assets: Bitcoin, Ethereum, XRP, Litecoin and Bitcoin Cash.
Institutional investors currently account for 9% of investments in cryptocurrencies, according to the news release. Historically, the biggest hurdle for institutional investors jumping into the cryptocurrency market has been a lack of custody capabilities. In late 2018, Fidelity Investments became the first major player in institutional custody to offer cryptocurrency custody and trade execution operations with the launch of Fidelity Digital Assets.