Zodia Custody, the cryptocurrency-focused subsidiary of the renowned British multinational bank Standard Chartered, is set to launch a staking service, known as “Zodia Custody Yield,” allowing its clients to generate returns on their cryptocurrency holdings. This move aims to combine the advantages of blockchain technology with the tokenization of real-world assets, such as treasury bills, to enable investors to earn yields.
Zodia Custody has partnered with OpenEden to bring forth this groundbreaking offering. With “Zodia Custody Yield,” institutional investors can access the off-chain yield possibilities for their on-chain assets, all while benefiting from the robust security safeguards offered by Zodia Custody’s platform. This encompasses staking, a method whereby cryptocurrency holders lock their digital assets to enhance blockchain security and, as a result, receive intermittent rewards in cryptocurrency.
While staking represents an appealing income opportunity for crypto businesses, it has raised regulatory concerns for U.S.-based firms. Notably, companies like Kraken and Coinbase have faced legal action from the SEC for providing similar products to retail customers without adequate risk disclosures.
In contrast, European companies are embracing staking services for institutional clients, driven by growing interest from these investors. Zodia, for instance, addresses institutional demand for “low-risk, liquid, and transparent” digital asset products that ensure stablecoin holders can generate returns on their assets.
Stablecoins, which are blockchain-based tokens backed by fiat currencies like the U.S. dollar, are widely used for value transfers and as collateral in blockchain and decentralized finance (DeFi) ecosystems. Jeremy Ng, co-founder of OpenEden, noted the significant opportunity to generate yields from the vast amount of stablecoins currently sitting idle and expressed the intention to achieve this through tokenized financial products that prioritize safety and transparency.
