In a groundbreaking move that signals a shift in the banking industry’s approach to Bitcoin, Standard Chartered is setting up a Bitcoin trading desk in London.
This move positions the British multinational bank as one of the first global banks to offer direct spot trading in digital assets, marking a significant step forward in the mainstream adoption of Bitcoin.
Standard Chartered’s decision to establish a spot trading desk for Bitcoin is a notable development in the financial world.
Historically, banks have been hesitant to engage directly in digital assets trading due to stringent regulations. Instead, they have focused on trading derivatives tied to these assets. However, Standard Chartered is breaking this mold by offering direct trading in the actual digital currencies.
According to a report from Bloomberg, the new trading desk will operate from London and be part of the bank’s foreign exchange (FX) trading unit. The desk is expected to begin operations soon, catering primarily to the bank’s institutional clients who have shown increasing interest in digital assets.
The move by Standard Chartered comes in response to growing demand from institutional clients for direct access to bitcoin trading. In a statement, the bank said:
“We have been working closely with our regulators to support demand from our institutional clients to trade Bitcoin and Ethereum, in line with our strategy to support clients across the wider digital asset ecosystem, from access and custody to tokenization and interoperability.”
It’s worth mentioning that regulatory collaboration is crucial for this trading desk. The Basel Committee on Banking Supervision has recommended that banks apply a 1,250% risk weighting to any unhedged digital currency exposure.
This high-risk weighting makes it challenging for banks to generate profits from trading digital currencies. Despite these challenges, Standard Chartered is pushing forward, signaling its commitment to integrating digital assets into its portfolio.
Geoffrey Kendrick, who leads digital asset research and emerging market foreign currencies at Standard Chartered, commented on this development, stating, “Albeit this is likely a 2025 story not a 2024 one.”
Related: CME Exchange Plans on Launching Bitcoin Spot Trading Platform
Standard Chartered’s foray into direct bitcoin trading is not its first venture into the digital asset space.
The bank part-owns Zodia Custody, an institutional digital asset custodian, and Zodia Markets, a trading platform for digital assets. These investments underscore the bank’s strategic approach to embracing this evolving ecosystem.
The announcement of Standard Chartered’s new trading desk has been met with enthusiasm from the Bitcoin community. Many view this move as a significant endorsement of the legitimacy and potential of Bitcoin.
On social media, users have expressed optimism that this development will boost investor confidence and drive further adoption of Bitcoin.
Binance CEO Richard Teng welcomed the news, highlighting the growing institutional acceptance of digital assets.
Additionally, analysts believe that Standard Chartered’s entry into spot trading will encourage other major banks to follow suit, leading to wider adoption and integration of digital assets into the traditional financial system.
Standard Chartered’s move comes at a time when the Bitcoin market is experiencing significant developments.
The recent approval and launch of Bitcoin exchange-traded funds (ETFs) in major markets like the US, UK, Hong Kong, and Australia show increased institutional interest in the digital asset.
These ETFs allow investors to gain exposure to bitcoin without directly purchasing the asset, further legitimizing it as an investment vehicle.
