TradFi Develops Blockchain Foundations, Transforming International Financial Systems

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TradFi Develops Blockchain Foundations, Transforming International Financial Systems

Bitget-RWA2025/11/25 15:02

By:Bitget-RWA

- Traditional banks like Standard Chartered and Citi expand crypto custody services, partnering with firms like 21Shares to integrate digital assets into core infrastructure. - Strategic moves include Standard Chartered consolidating custody under its parent bank and Citi enhancing fiat-stablecoin transaction capabilities with Coinbase . - Regulatory developments, such as Japan's proposed reserve rules for exchanges , and $4.65B Q3 2025 crypto VC funding highlight sector maturation and institutional adopti

Established financial institutions are ramping up their involvement in the cryptocurrency industry, as evidenced by 21Shares appointing Standard Chartered to safeguard its digital assets. This decision highlights the increasing impact of traditional finance on crypto infrastructure. The Swiss asset management firm, which had previously worked with Zodia Custody—a crypto-focused arm of Standard Chartered—now appears to be centralizing its custody operations within the bank’s larger structure.

Margaret Harwood-Jones, who leads global financing and securities services at Standard Chartered, described the partnership as a chance to "bring our knowledge to the rapidly changing digital asset landscape," underlining the bank’s growing presence in asset custody.

21Shares, known for its crypto exchange-traded products, pointed to Standard Chartered’s strengths in international banking and risk oversight as major benefits.

Mandy Chiu, global head of product development at 21Shares, called the collaboration a "landmark" in building institutional-grade digital asset infrastructure.

. This development is part of a wider movement of legacy banks entering the digital asset arena. In September,

US Bancorp

resumed its digital asset custody offerings for asset managers

according to reports

, while

Citi

recently joined forces with

Coinbase

to simplify digital asset transactions for institutional customers.

The Wall Street powerhouse is looking to improve fiat entry and exit points and payment coordination

, and is considering 24/7 fiat-to-stablecoin transfers in the future.

This transition brings up questions about the future of Zodia Custody. As a fully owned subsidiary of Standard Chartered since 2020, Zodia had previously managed 21Shares’ assets, indicating the bank’s earlier intent to keep direct crypto exposure at arm’s length. However,

Standard Chartered’s recent introduction of a Luxembourg-based digital asset custody platform and a trading service for institutions set to launch in mid-July

suggests a deliberate shift toward deeper engagement in the sector.

TradFi Develops Blockchain Foundations, Transforming International Financial Systems image 0

At the same time, other industry moves signal the sector’s ongoing development. Paxos, a regulated fintech company, has acquired Fordefi—a custody and security provider for on-chain activities—to strengthen its infrastructure for the "on-chain economy."

Fordefi’s multi-party computation (MPC) wallet solution

supports secure management of digital assets across both centralized and decentralized systems, with clients such as PayPal and Mastercard. Meanwhile, Japan is advancing stricter reserve requirements for crypto exchanges to address risks highlighted by major incidents like Bybit’s $1.46 billion hack in February 2025.

The new regulations would bring Japan’s protections in line with those in the EU and Hong Kong

, mandating capital reserves and insurance coverage for customer holdings.

Investment patterns also reflect the industry’s transformation.

Crypto venture capital investments climbed to $4.65 billion

in the third quarter of 2025, marking the second-highest total since the FTX collapse. Although enthusiasm for NFTs and Web3 gaming has diminished, a notable portion of deals involved startups founded in 2024, indicating ongoing innovation. Institutional investors are increasingly drawn to liquid, regulated offerings such as spot

Bitcoin

ETPs, moving away from speculative investments as rising interest rates and the growth of AI influence capital allocation strategies.

As banks and regulators continue to adapt their strategies, the crypto sector stands at a pivotal point. With institutions like Standard Chartered and Citi weaving digital assets into their main services, the boundaries between traditional finance and crypto are becoming less distinct—a transformation that could reshape the global financial system.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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