Standard Chartered will open Bitcoin custody in Hong Kong in January next year! Traditional banks are entering the encryption battlefield.

Standard Chartered Hong Kong and Greater China and North Asia Chief Executive Officer Judy Hsu stated that Standard Chartered will launch innovative digital asset solutions in Hong Kong next year, including digital asset custody services supporting the two largest crypto assets by market capitalization, namely Bitcoin and Ethereum, as well as strategic partnerships with other institutions. Standard Chartered Hong Kong pointed out that the bank plans to be the first to launch digital asset custody services supporting Bitcoin and Ethereum in Hong Kong in January next year, expanding the services currently offered in Luxembourg and the UAE.

Standard Chartered to Launch Bitcoin Custody Service in Hong Kong in January Next Year

Standard Chartered's Chief Executive for Hong Kong and Greater China, Mary Huen, stated that Standard Chartered welcomes the “Fintech 2030” announced by the HKMA. This announcement coincides with the ongoing “Hong Kong Fintech Week.” Next year, Standard Chartered will launch innovative digital asset solutions in Hong Kong, including digital asset custody services supporting the two largest cryptocurrencies by market capitalization, namely Bitcoin and Ether, as well as strategic partnerships with other institutions.

Standard Chartered Hong Kong pointed out that the bank plans to launch digital asset custody services supporting Bitcoin and Ether in Hong Kong first in January next year, expanding the services currently offered in Luxembourg and the UAE (through the Dubai International Financial Centre). This marks the official opening of cryptocurrency custody business by Standard Chartered at its Asia headquarters, which is a milestone for both the Hong Kong crypto ecosystem and traditional banking.

The timing of this decision is highly strategic. The Hong Kong Monetary Authority has just announced the “Fintech 2030” vision, clearly identifying digital assets and stablecoins as key development areas for the next decade. The Hong Kong Securities and Futures Commission is also easing global liquidity access restrictions for crypto exchanges and plans to issue the first batch of stablecoin licenses. Against the backdrop of this policy support, Standard Chartered has chosen to launch custody services at this time, which allows them to benefit from policy incentives and seize market opportunities.

Standard Chartered has operational experience in custody services in Luxembourg and the UAE, which provides a technical and procedural foundation for its Hong Kong business. Luxembourg is one of Europe's financial centers, while the UAE is a hub for crypto innovation in the Middle East. Standard Chartered plans to replicate the successful experiences from these two locations in Hong Kong and adjust them to the characteristics of the Asian market, potentially significantly shortening the time to launch and reducing risks.

From a competitive perspective, Standard Chartered is not the first traditional bank to offer crypto custody in Hong Kong, but its participation as an international large bank will significantly enhance the compliance and credibility of the entire industry. When a banking giant like Standard Chartered, which has a 170-year history and operates in over 60 markets globally, enters the crypto custody space, it is itself a strong endorsement of digital assets as a legitimate asset class. This will attract more conservative institutional investors to consider allocating Bitcoin and Ethereum.

Key Information on Standard Chartered Digital Asset Custody Services

Launch Date: January 2026

Launch Location: Hong Kong (Asia Headquarters)

Supported Assets: Bitcoin, Ethereum (the two largest crypto assets by market capitalization)

Current Services: Luxembourg and Dubai in the UAE are operational.

Strategic Positioning: Expand the Asian digital asset ecosystem

Policy Background: In line with the Hong Kong Monetary Authority's “Fintech 2030”

Wen Tuo Si: Currency will be fully digitized with technology from encryption.

On November 4, Standard Chartered's CEO Bill Winters stated at the Financial Summit that currency will ultimately be fully digitized, requiring a completely new infrastructure that is currently being constructed, with technology derived from encryption. He pointed out that banks need to collaborate with regulatory bodies and other market participants to jointly create a secure infrastructure. These words from the highest levels of traditional banking are extremely shocking, as they represent a comprehensive recognition of encryption technology by traditional finance.

Wen Tuo Si believes that the Hong Kong Monetary Authority is very forward-looking in the area of digital currency, such as promoting tokenized bank deposits and Hong Kong dollar stablecoins. Although the renminbi stablecoin is not currently on the agenda, Hong Kong, as a testing ground, may have relevant connections in the future. This statement shows that Standard Chartered is actively participating in Hong Kong's digital currency experiment and is optimistic about Hong Kong's position in the global digital financial competition.

Wen Tuo Si believes that stablecoins are the most obvious application scenario in cross-border payments. For most people, cross-border payments are usually slow and expensive, and they still cannot achieve 24/7 instant processing. He pointed out that there are already many practical cases where, in the absence of regulation or alternatives, relevant cross-border transactions use USD stablecoins, as there are about 80 billion USD worth of stablecoins in the market, with high liquidity, and users already possess digital wallets.

Although there are regulatory factors that exist in reality and they cannot be freely used, he believes that the entry of digital assets or blockchain payments into the real economy is inevitable; it is just a matter of time. The industry should think more strategically about how to shape this outcome rather than letting it develop naturally. This attitude of “actively shaping rather than passively responding” shows that Standard Chartered is viewing digital assets as the core business of the banking industry in the future, rather than a fringe experiment.

Wen Tuo Si added that deliberately developing a financial system that excludes banks is “almost a crazy practice,” because banks are the only regulatory bodies that can truly see and understand the accumulation of systemic and operational risks. This statement is both a criticism of the current crypto regulation and a defense of the legitimacy of banks entering the crypto space.

JPMorgan vs Standard Chartered's Digital Asset Strategy

Daniel Pinto, Vice Chairman of JPMorgan, pointed out that stablecoins have many practical application scenarios, especially for cross-border small payments. This could pose challenges to existing payment systems, such as traditional tools like credit cards or debit cards. However, Bitcoin is very slow, and Ethereum is slightly faster, making the cost still relatively high for small payments. With technological advancements, existing payment infrastructures may be impacted, and it could even change the way market transactions are conducted, but banks will still need time to establish suitable regulatory frameworks to truly become part of this ecosystem.

The bank issued tokens on a private chain in 2019. Daniel Pinto stated that it is quite useful for customer fund flows and programmed payments, allowing for around-the-clock payments between banks. He believes that tokenized deposits can effectively enhance interoperability between the banking industry and the crypto assets field, and the digitization of assets will begin to accelerate growth.

However, he believes that the biggest challenge facing the banking industry is still regulatory issues. According to the regulatory requirements and interpretations of the Basel Accord, banks are essentially prohibited from participating in public chains because the required capital intensity is too high, which makes it almost impossible for banks to participate. However, the U.S. Genius Act does not seem to follow the framework of the Basel Accord, so in this case, it is possible to push forward.

Bitcoin is becoming an asset class, but Daniel Pinto is concerned that many keys to Bitcoin have been lost or stolen, affecting people's confidence in Bitcoin as an asset class. He believes that Bitcoin is transforming into an asset class that has never existed before; it can serve as a store of value tool, provided that investors believe they can sell it at a higher price in the future. However, it is not a payment method, as it is slow and costly.

This cautious yet undeniable attitude represents the mainstream view of traditional banking towards Bitcoin: recognizing its value as an asset class, but holding reservations about its payment functionality.

Standard Chartered Participates in Hong Kong Digital Financial Innovation Program

Standard Chartered Hong Kong mentioned that it has been actively supporting various innovative projects to promote the development of a comprehensive digital asset ecosystem in Hong Kong, covering multiple areas such as retail and corporate clients, local and cross-border transactions, and participating in several pilot innovation programs led by the Hong Kong Monetary Authority, including the Ensemble project, the mBridge project, the “Digital Hong Kong Dollar” pilot program, the GenA.I. sandbox, and the distributed ledger technology regulatory incubator.

This comprehensive participation shows that Standard Chartered is viewing digital assets as a core part of banking operations rather than a peripheral experiment. The Ensemble project is a tokenized deposit and smart contract payment initiative promoted by the Hong Kong Monetary Authority, with Standard Chartered as one of the participating banks, testing how to tokenize bank deposits and circulate them on the blockchain. The mBridge project is a cross-border payment experiment involving multiple central banks, utilizing blockchain technology for instant cross-border settlement of central bank digital currencies.

The “Digital Hong Kong Dollar” pilot program is Hong Kong's version of the central bank digital currency (CBDC) experiment, with Standard Chartered participating in testing the application of the digital Hong Kong dollar in retail and wholesale scenarios. The GenA.I. sandbox allows banks to test the application of generative AI in financial services. The distributed ledger technology regulatory incubator focuses on exploring how blockchain technology can improve regulatory efficiency and transparency.

Standard Chartered's participation in all these projects demonstrates its strategy of “fully embracing digital finance.” This is not simply about providing crypto custody services, but rather systematically integrating new technologies such as blockchain, crypto assets, central bank digital currencies, and AI into the core business of banking. This forward-looking layout positions Standard Chartered advantageously in the competition of digital finance.

From the perspective of Hong Kong, the active participation of large international banks such as Standard Chartered is a key factor in Hong Kong becoming a global digital asset center. If only local small institutions participate, Hong Kong will struggle to compete with rivals like Singapore and Dubai. The entry of large banks like Standard Chartered and HSBC provides scale, professionalism, and international connectivity to Hong Kong's digital financial ecosystem.

Regulatory Challenges and Opportunities for Traditional Banks Entering Encryption

The biggest challenge facing the banking industry remains regulatory issues. According to the regulatory provisions and their interpretations of the Basel Accords, banks are essentially prohibited from participating in public chains, as the required capital intensity is too high, making it almost impossible for banks to get involved. The Basel Accords require banks to hold more than 100% of capital against their positions in crypto assets, which means that if a bank holds 1 dollar of Bitcoin, it needs to prepare more than 1 dollar of capital as a buffer, which is economically nearly unfeasible.

However, the U.S. “Genius Act” does not seem to follow the framework of the “Basel Accords,” so it is possible to promote in this case. If the U.S. takes the lead in relaxing capital requirements for banks holding Crypto Assets, it could trigger a reevaluation of global regulatory frameworks. As an international financial center, Hong Kong may follow or even lead this trend, providing banks with a more flexible regulatory environment for Crypto business.

Wen Tuo Si added that deliberately developing a financial system that excludes banks is “almost a crazy approach” because banks are the only regulatory bodies that can truly see and understand the accumulation of systemic risks and operational risks. This perspective emphasizes the core role of banks in the financial system and the importance of their participation in the encryption field for system stability. If the crypto market develops entirely outside the banking system, regulators will lose effective tools to monitor and manage risks.

Daniel Pinto is concerned that many keys for Bitcoin have been lost or stolen, affecting people's confidence in Bitcoin as an asset class. This is exactly where the value of traditional bank custody services lies. Standard Chartered's institutional-grade custody employs professional security measures such as multi-signature, cold storage, and insurance protection, significantly reducing the risks of key loss and theft. For institutional investors, this type of professional custody service is a prerequisite for entering the crypto market.

From a more macro perspective, the entry of traditional banks such as Standard Chartered and JPMorgan into the encryption field marks a critical turning point for Crypto Assets to move from the margins to the mainstream. When the world's most conservative and heavily regulated financial institutions begin to offer Bitcoin custody services, this asset class has undeniably become part of the financial system. This mainstreaming has profound implications for the long-term development of Bitcoin and the entire crypto market.