Standard Chartered plans to take back customer-facing custody tasks at Zodia Custody into the digital assets department of the company's Corporate and Investment Bank (CIB).
The restructuring, which could be announced as early as this month, will according to sources from Bloomberg familiar with the matter, lead to Zodia only operating as a separate Software-as-a-Service (SaaS) platform for custody technology.
From incubation to independence to backtracking
Standard Chartered established Zodia Custody in late 2020 through its innovation environment SC Ventures, along with Northern Trust.
The custody solution later attracted minority investors, including SBI Holdings, National Australia Bank, and Emirates NBD. The company now has around 150 employees spread across seven offices globally.
Zodia has seen good growth. In January 2026, they became the first custody player to support AUDM, an Australian dollar stablecoin.
The month after, they launched Zodia Switch, which allows customers to swap assets directly within the platform without external pre-funding.
However, Standard Chartered launched its own Luxembourg-based digital custody solution last year and started institutional crypto trading separately.
Overlap between the parent company and the subsidiary made a restructuring likely.
It is still unclear whether Standard Chartered has consulted Zodia's minority shareholders.
Banks are taking custody back in-house
The market for digital asset custody now exceeds $1 trillion and is expected to reach $7 trillion by 2035, with an annual growth rate of about 23.7%.
According to EY-Parthenon's survey from 2026, 73% of institutional investors plan to increase their exposure to digital assets this year.
The increasing demand is pushing banks deeper into direct custody. State Street and BNY Mellon have built their own internal departments for digital custody.
Morgan Stanley applied for its own national license as a trust bank in February to oversee the custody and staking of crypto assets under federal supervision.
Analysts see the restructuring as a turning point, where some believe that when a Tier-1 global bank moves crypto custody into the investment bank, it is no longer a battle between crypto and TradFi, but that crypto becomes an integral part of TradFi.
Zodia was originally built as a standalone entity to safely test the waters, and the backtracking will only occur when the parent company views digital assets as real, revenue-generating assets in the capital market.
At the same time, others suggest that there is a broader pattern where traditional banks are taking digital tasks from experimental companies back to core operations within regulated frameworks, pointing out that it was inefficient to operate parallel services.
“…Those in suits have finally realized that it is inefficient to do the same thing twice. Revolutionary,” as one user wrote.
What this says about independence for crypto custody
The answer is becoming increasingly clear. Independence for bank-supported custody solutions served a specific purpose in the testing phase 2020-2023, when regulatory uncertainty made arm's length entities necessary.
Now that frameworks like MiCA in Europe and the GENIUS Act in the USA have reduced this friction, banks no longer need intermediaries to handle digital assets.
“This reflects a broader trend where traditional banks are taking digital functions from experimental companies back to core and regulated operations – driven by frameworks like MiCA and VARA,” the user added.
Zodia's hybrid outcome says a lot. The technology still has intrinsic value as a SaaS platform, but the actual custody of customers' assets, which is the most trust-based and margin-rich part of the value chain, is being moved back to the parent company's balance sheets.
This divide shows what banks really want to own themselves, and what they might consider licensing out.
Crypto-native custody players like Coinbase Custody, BitGo, and Fireblocks still hold nearly half of the global market.
Can they defend this market share against a banking system that is now determined to take custody back to its own books?