Editors’ Choice Awards 2022: Digital Assets Initiative of the Year shortlist

As Global Custodian previews its upcoming Leaders in Custody awards on 4 May, we look at the nominees for Digital Assets Initiative of the Year, a new and coveted category.

By Editors

Northern Trust/Standard Chartered – Zodia

In a space where, seemingly, only few saw the benefit of being first-to-market, Standard Chartered and Northern Trust introduced their combined crypto custody offering Zodia in December 2020. The launch put them ahead of their global custody rivals and piqued the interests of many due to the uniqueness of the collaboration.

Two custody giants headquartered across the world from each other uniting on a new project, a separate entity giving Zodia the benefit of the custody experience but the agility of a start-up.

Undoubtedly, institutional investors are looking for familiarity in their digital assets’ custodians and Zodia has sought to do just that in the UK for Bitcoin and Ethereum. Over the past 12 months, the milestones have come thick and fast.

Under the guidance of Maxime De Guillebon, CEO, Zodia Custody, the company received regulatory approval in the UK in July 2021, successfully registering with the Financial Conduct Authority (FCA). The approval enabled it to provide commercial services to clients as a crypto-asset business, a key milestone as it prepares to launch.

Not long after, Pure Digital successfully executed a live test trade on its wholesale digital currency trading platform, leveraging Zodia Custody, following the signing of a Memorandum of Understanding.

Then in November 2021, we discovered that Northern Trust is set to play a major role in supporting a new Physical Bitcoin ETP from Invesco through Zodia – along with providing fund administration services.

State Street Digital

After years of deliberation and industry chatter, State Street officially launched its new unit dedicated to evolving its role in digital finance in June 2021, marking its expansion into cryptocurrencies, central bank digital currencies (CBDC) and tokenisation. The new unit, State Street Digital sought to address the industry-wide shift to a digital economy under the guidance of GC legend Nadine Chakar.

State Street had been involved in the digital assets discussion for years through a talented team of crypto specialists, but the launch really cemented its goals in the space.

The custodian has continued lobbying for regulation around digital assets, agreeing to service future Bitcoin ETFs and signing partnerships over the past 12 months.

Its most recent move saw the Boston-headquartered asset servicer enter into a licensing agreement with Copper.co to develop and launch a digital custody offering.

The global custodian will utilise Copper.co’s technology to build a platform where clients can store and settle their digital assets within a secure environment managed by State Street. Copper.co, a London-based provider of digital asset custody and trading infrastructure, provides solutions across 450 crypto-assets and more than 40 exchanges.

Earlier in the year, State Street was also selected to provide custody services to the Digital Securities Depository Corporation (DSDC), a cross-border securities settlement infrastructure for digital depositary receipts (DDRs) in the US public market. 

State Street has firmly latched onto digital assets as a growth area for the future in a rapidly evolving custody space filled with as many challenges as opportunities.

SIX Digital Exchange

Officially the first incumbent custodian and market infrastructure provider to the digital asset party, SIX Digital Exchange (SDX) has certainly had a different level of expectations compared with its securities services counterparts over the past couple of years. While others are earning their plaudits simply for launching, SDX is now at a level where the market is looking for developments and progress, and over the past 12 months the exchange group has delivered.

Despite some leadership changes in recent years, in 2021 SDX named David Newns, a former trading and execution executive from State Street, as its new CEO, as it looked to take its digital assets platform to the next stage of rollout. 

Following this, the Swiss Financial Market Supervisory Authority (FINMA) authorised SIX Digital Exchange AG to act as a central securities depository and the associated company, SDX Trading, to act as a stock exchange.  

“This authorisation enables SDX to go live with a fully regulated, integrated trading, settlement, and custody infrastructure based on distributed ledger technology for digital securities. With these licenses, SDX can now offer the highest Swiss standards of oversight and regulation,” commented a spokesperson for SIX at the time.

Along with other appointments and partnerships, SDX has also been progressing Project Helvetia, a multi-phase investigation by the BIS Innovation Hub, the Swiss National Bank (SNB) and SIX – with latest experiments involving the settlement of interbank, monetary policy and cross-border transactions on the test systems of SDX.

The unit also successfully developed a post-trade solution that empowered the Cyprus Stock Exchange (CSE) to provide safekeeping, settlement and asset servicing through its CSD for the Cyprus government’s EMTNs.

Societe Generale – SG Forge

The past 12 months have represented the most active period in SG Forge’s relatively short lifespan when it comes to milestones, as the unit has firmly established itself in the European innovation space.

A fully integrated subsidiary of Societe General Group, SG Forge, provide issuers and investors with end-to-end services to issue and manage digital-native financial products registered on the blockchain (Security Token), while building institutional-grade frameworks and models for Security Token operations.

In April, Global Custodian discovered that Societe Generale Securities Services (SGSS) was aiming to develop custody and asset servicing for digital assets through a new dedicated unit, marking the next step for Forge.

The move built on SGSS’ participation in several projects relating to crypto assets and distributed ledger technology (DLT). Including issuing the first structured product as a security token directly registered on the Tezos public blockchain platform. 

Since then, we saw AXA Investment Managers and Forge successfully complete their first transaction based on blockchain infrastructure, while French asset management firm Melanion Capital appoint Societe Generale Securities Services (SGSS) as depobank, custodian, transfer agent and fund administrator for the issuance of the first Bitcoin related ETF UCITS.  

In January 2022, the Luxembourg Stock Exchange (LuxSE) admitted financial instruments registered on public distributed ledger technology (DLT) from Societe Generale’s digital assets arm, SG-Forge.