Sodia Custody, Standard Chartered’s crypto asset servicing subsidiary, said Ireland has a “real opportunity” to become a European hub for the industry in the coming years as the EU moves to implement new rules for the sector.
In partnership with blockchain infrastructure company BlockDemon, the company, which currently employs 10 people in Dublin, is launching a new staking service for institutional investors interested in crypto.
Crypto staking is a way for investors to earn passive income or rewards from “proof-of-stake” assets by locking them for a set period of time in the blockchain, a decentralized network that logs transactions in a particular asset. Companies like Coinbase have established “as a service” businesses in recent years as a way to tap into investor interest.
US regulators, with the Securities and Exchange Commission announcing legal action against Coinbase on Tuesday, have taken a more jaundiced view of the practice. Federal authorities forced to shut down crypto exchange Kraken’s staking business have now accused Coinbase of offering unregistered securities in the form of its staking program.
The Central Bank of Ireland, which authorized Sodia Custody Ireland under the virtual asset service provider regime last year, has issued several warnings in recent years about the risks associated with investing in volatile digital assets.
Sodia, which is backed by Northern Trust and SBI Holdings, said the partnership with BlockDemon will allow it to offer staking services to institutional clients in Europe and abroad.
John Cronin, chief executive of Sodia Custody Ireland, said that although institutional exposure to crypto was perceived to be low in Ireland, interest was growing across Europe.
“More and more, institutions are holding proof-of-stake digital assets because they are seen as the most ‘institutional friendly’ of all digital asset types,” he said. Dubbed “Staking 2.0″″, Cronin said the partnership is a model that “gives organizations greater assurance through seamless security measures, full automation and price transparency.”
Cronin said Zodia intends to make Dublin its European hub once the EU’s Markets in Crypto Assets (MiCA) regulations – the world’s first comprehensive legal framework for the sector – are fully implemented within the next two years.
“Ireland has a real opportunity to become the MiCA hub for the industry and further grow an already vibrant ecosystem with existing expertise in fintech and investment management,” he said. “The combination of these factors – including ourselves and our staking partner BlockDemon, along with a number of firms in the digital asset space already operating in Ireland – creates a very compelling proposition.”
Cronin said that “how we continue to develop our offering to our clients” and as its client base grows “so will our Irish operations”.