Customary Chartered is planning to reabsorb the client-facing custody operations of Zodia Custody into the digital belongings division of its Company and Funding Financial institution (CIB).
The restructuring, which might be introduced as early as this month, would go away Zodia working solely as a standalone Software program-as-a-Service (SaaS) platform for custody know-how, based on Bloomberg sources aware of the matter.
From Incubation to Independence to Reabsorption
Customary Chartered established Zodia Custody in late 2020 by way of its innovation arm SC Ventures, alongside Northern Belief.
The custodian later attracted minority buyers, together with SBI Holdings, Nationwide Australia Financial institution, and Emirates NBD. It now employs round 150 folks throughout seven workplaces globally.
Zodia had been gaining traction. In January 2026, it grew to become the primary custodian to assist AUDM, an Australian greenback stablecoin.
The next month, it launched Zodia Change, enabling shoppers to swap belongings immediately inside the custody platform with out exterior pre-funding.
Nonetheless, Customary Chartered launched its personal Luxembourg-based digital asset custody final 12 months and rolled out institutional crypto buying and selling individually.
The overlap between mum or dad and subsidiary made a restructuring seemingly.
It stays unclear whether or not Customary Chartered has consulted Zodia’s minority shareholders.
Banks Are Pulling Custody In-Home
The digital asset custody market presently exceeds $1 trillion and is projected to achieve $7 trillion by 2035 at a compound annual development price of roughly 23.7%.
Based on the 2026 EY-Parthenon survey, 73% of institutional buyers plan to extend digital asset allocations this 12 months.
That rising demand is pulling banks deeper into direct custody. State Road and BNY Mellon have scaled inner digital custody divisions.
Morgan Stanley filed for a devoted nationwide belief financial institution constitution in February to custody and stake crypto belongings below federal supervision.
Analysts see the restructuring as a turning level, with some arguing that when a Tier-1 world financial institution strikes crypto custody into its funding financial institution, it stops being a contest between crypto and TradFi and turns into crypto embedded inside TradFi.
Zodia was initially constructed as a standalone automobile to check the waters safely, and its reabsorption solely occurs when the mum or dad sees digital belongings as actual, fee-generating capital markets enterprise.
In the meantime, others recommend a wider sample of conventional banks pulling digital asset capabilities from experimental ventures into core regulated operations, noting that operating parallel companies was merely inefficient.
“…The fits lastly realized operating the identical factor twice is inefficient. Revolutionary,” one consumer acknowledged.
What This Says About Crypto Custody Independence
The reply seems more and more clear. Independence for bank-backed custodians served a selected objective in the course of the experimental part of 2020-2023, when regulatory uncertainty made arm’s-length buildings obligatory.
Now that frameworks like MiCA in Europe and the GENIUS Act within the US have lowered that friction, banks not want buffer entities to have interaction with digital belongings.
“This mirrors a wider development of conventional banks pulling digital asset capabilities from experimental ventures into core regulated ops – pushed by frameworks like MiCA and VARA,” the consumer added.
Zodia’s hybrid final result is telling. The know-how retains standalone worth as SaaS, however the precise safekeeping of consumer belongings, the highest-trust and highest-margin piece of the worth chain, strikes again onto the mum or dad financial institution’s books.
That distinction reveals what banks really wish to personal versus what they’re keen to license out.
Crypto-native custodians like Coinbase Custody, BitGo, and Fireblocks nonetheless maintain practically half the worldwide market.
Can they defend that share towards a banking sector now decided to convey custody in-house?
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