London-based global banking giant Standard Chartered is preparing to take a new step as institutional demand for crypto assets rapidly increases. According to sources close to the matter who spoke to Bloomberg, the bank plans to establish a crypto prime brokerage service targeting hedge funds and asset management companies. This structure is expected to be located within SC Ventures, the bank's wholly owned venture and innovation arm. Discussions are in the early stages, and there is no definite launch date yet. This strategic move could allow Standard Chartered to grow its crypto activities while avoiding regulatory capital pressures. Basel III regulations, which make it difficult for banks to directly hold crypto assets on their balance sheets, mandate a very high risk weighting of 1,250% for assets like Bitcoin and Ether, which operate on permissionless blockchains. In contrast, this rate is as high as 400% for some venture capital investments. Establishing the new structure outside the main bank, under the umbrella of SC Ventures, is seen as the most practical way to avoid this heavy capital burden. Standard Chartered is not a new player in the crypto space. The bank has previously supported initiatives such as Zodia Custody, which offers institutional custody services, and Zodia Markets, an institutional trading platform. Approximately six months ago, it announced that it would be offering spot crypto trading services to institutional clients as a large, systemically important global bank. The announcement of a joint venture called “Project37C,” shared by SC Ventures on LinkedIn in December, also signaled this expansion. This project was described as a “light financing and market platform” including services such as custody, tokenization, and access to digital markets.
What does prime brokerage mean?
Prime brokerage models provide institutional investors with financing, custody, and trading services under one roof, creating a critical infrastructure, especially for hedge funds. With rapidly increasing institutional interest, this area is growing globally. In April, Ripple acquired Hidden Road, a major brokerage firm, for $1.25 billion. In October, FalconX announced an acquisition agreement with 21Shares, an ETF issuer. These developments are not limited to Europe. In the US, major banks are also delving deeper into cryptocurrency. JPMorgan Chase announced it is evaluating crypto trading services for its institutional clients, while Morgan Stanley applied for ETFs based on Bitcoin, Ether, and Solana. These moves further intensify competition in the spot crypto ETF market, where giants like BlackRock and ARK Invest are already active. The total size of spot crypto ETFs in the US has reached approximately $140 billion in just two years. On the market front, Bitcoin started 2026 just above $92,000. After a brief drop to $90,000, the price shows a limited year-on-year decline. According to Brian Vieten of Siebert Financial, this sideways movement was linked to tax optimization-driven sell-offs and concerns that MSCI might delist digital asset treasuries. MSCI's reversal of this idea has removed one of the uncertainties in the market.
